Pakistan’s PLL Breached LNG Supply Deal With SOCAR to Lower Spot Prices

The government-to-government deal between Pakistan and Azerbaijan for the delivery of one LNG cargo per month from SOCAR to Pakistan has likely been breached by Pakistan, after leveraging the price for its latest LNG buying tender according to International The News.

• Pakistan LNG Limited (PLL) used the price offered from SOCAR as a tool to bring down the bid prices from the lowest bidder OQ trading of $18.46/mmbtu in the latest tender round, senior officials involved in the bidding process told The News.
• The OQ Trading on Friday offered the lowest bid of $18.46/mmbtu for one LNG cargo to be delivered on 8-9 January 2024, followed by Vitol Bahrain at $18.58/mmbtu, QatarEnergy Trading at $19.43/mmbtu, and Trafigura at $19.64/mmbtu.
• Under the gtg contract with SOCAR, PLL secured the January LNG cargo at $17.96/mmbtu.
• PLL contacted OQ trading to ask to lower the bid to match the SOCAR offer, and in turn OQ trading lowered the offer to $17.95/mmbtu. This may warrant legal action by SOCAR.
• “This has virtually annoyed SOCAR as it is of the view that PLL has breached the sanctity of confidentiality, which is against spirit of GtG deal. It says PLL has no right to use the price offered under the GtG contract with the bidders’ price” officials said while quoting the SOCAR management.
• SOCAR did not reply in detail when contacted by The News but confirmed that confidentiality had been breached.