Copyright brecorder
ISLAMABAD: The Petroleum Division has said that 60 cargoes of LNG with Qatar have a price review clause opening in March 2026, while quantity cannot be reviewed before 2031 as per the contract, sources told Business Recorder. This viewpoint was adopted by Petroleum Division during the meeting of task force on gas sector circular debt which is finalizing its recommendations. Minister for Petroleum for Natural Resources, Ali Pervaiz Malik has also visited Qatar to discuss future strategy for LNG cargoes delivery. System operators (power and gas sectors) coordinate on a regular basis (daily basis) to regulate day ahead utilization of allocated gas/RLNG for projected demand. QatarEnergy plans Pakistan talks next week to discuss LNG delay: Bloomberg report On daily basis power sector largely utilizes the contracted quantities, however due to unforeseen fluctuations in daily demand during the day mainly driven by weather patterns form the projections, ISMO deviates from committed allocation. The Power sector also facilitates the utilization of power plants out of merit where the gas sector has issues of the line pack situations. This also results in curtailment of indigenous gas to allow diversion of RLNG to other consumption segments. According to Power Division, the power sector submits firm RLNG demand for the three Government Power Plants (GPPs) by July 25th of the preceding year on monthly basis for the following year. For other power plants, RLNG demand is submitted to SNGPL by September for the following year. Monthly demand for plants other than 03 GPPs can be adjusted 120 days prior to the relevant consumption month. As per the agreed formula, Net Proceed Differential (NPD) is charged based on the lesser of (i) unutilized volume of the 03 GPPs or (ii) total power sector unutilized volume. However, if the power sector meets the 03 GPPs commitment no NPD is levied, however if power deviates from total RLNG demand, surplus RLNG is diverted to other consumers, leading to financial losses. The RLNG requirements of the power sector are shared with the Petroleum Division on a case-to-case basis, as needed. As per Petroleum Division, it has entered into intergovernmental RLNG contracts with Qatar on behalf of the power sector. However, over time, the power sector has been consistently reducing its RLNG demand, necessitating the diversion of contracted volumes to other consumer segments. RLNG demand shared on monthly basis, however, demand fluctuates on hourly resolution. High intra- day and intra month electricity demand fluctuations have been observed owing to uncontrollable factors including weather patterns (heat waves, cold spells), high solar penetrations, etc. Changes in hydrological generation patters (Dry, wet seasons) which accounts for around 32% of the installed capacity mix. Unpredictable events due to climate change specifically heavy rains resulting in low electricity demands in summers. During winter months, multiple instances have been observed where SNGPL, due to system constraints, curtails RLNG supply to the power sector despite prior confirmation of firm demand under the Annual Delivery Plan. Additionally, power plants are occasionally dispatched out of merit to assist in maintaining SNGPL’s line pack pressure, leading to operational inefficiencies and increased costs, which are ultimately passed on to power sector consumers. The government of Pakistan has signed 120 cargoes per annum from Qatar till 2031 with the following bifurcation: 108 cargoes per annum (60 cargoes @ 13.37% & 48 cargoes 10.2%) with Qatar Petroleum 12 cargoes per annum (@ 12.14%) with ENI (Pvt.) Ltd. Petroleum Division in consultation with relevant authorities of the Qatar decides the Annual Delivery Plan (ADP) (monthly placement of cargoes) for the following year from Sept 15 to Oct 15 of the preceding year. ENI cargoes can be sold in the market on mutual agreement. However, for contracts with Qatar Petroleum Net Proceed Differential (NPD) clause exists, which says that on the time of ADP finalization, the Pakistan side shall share the number of cargoes for NPD, which will be sold in market by Qatar side. Any profit against sales in the market will belong to Qatar Petroleum, however any loss will be borne by the GoP. Copyright Business Recorder, 2025
