Connect with us


The gymnastics behind Pakistan’s doable first personal LNG cargo import 



Pakistan Gasport is pursuing a spot deal for liquefied pure gasoline (LNG) in November, ending a 16-month drought within the nation’s spot LNG market. The deal is the doable decision of a protracted dispute between Pakistan LNG (PLL) and Gasport over the utilisation of extra capability at an LNG terminal.

The 2 events signed an settlement in August 2022 to use the idle capability of Gasport’s terminal, which may accommodate 750 million cubic toes per day (mmcfd) of LNG, whereas PLL solely has an allotment of 600 mmcfd. The settlement would allow Gasport to import LNG by itself and slash the capability expenses from $0.42 to $0.38 per million British thermal items (mmbtu).

Nevertheless, the earlier authorities renounced the settlement, leaving the terminal languishing. The caretaker authorities has vowed to enact the settlement by 17 September 2023, paving the way in which for personal sector involvement in LNG imports.

“I imagine there’s immense potential when it comes to empowering a personal sector firm to import LNG. It’s undoubtedly a welcome growth as a result of it’s step one in transferring away from the one purchaser mannequin that we’ve got for vitality in Pakistan,” contends Mustafa Pasha, Chief Funding Officer at Lakson Investments.

Why don’t personal corporations import LNG in Pakistan? 

Non-public sector corporations in Pakistan have traditionally shunned importing LNG for numerous causes. Firstly, the federal government owns all the capability within the nation, and till the Oil and Gasoline Regulatory Authority handed the Gasoline Third Occasion Entry Guidelines (TPA) in 2018, the 2 Sui Corporations had a monopoly on the gasoline supply system in Pakistan.

All of this, nevertheless, has fortuitously fallen in place for Gasport on account of its aforementioned settlement to permit it to proceed with its maiden enterprise. “There are not any dangers in any respect. We’d like extra personal events doing this, and fewer authorities,” declares impartial financial analyst Ammar Habib Khan.

While historic obstacles may be out of the way in which for Gasport, it has to grapple with extra modern ones.

Getting the worth proper 

“Numerous international locations have introduced us with a spread of choices. If the federal government or another entity can procure LNG at a worth equal to or decrease than 12% of Brent, there’s a marketplace for it,” Ahmed Z. Iqbal, Chairman of Gasport, knowledgeable the media. Ahmed’s calculations quantity to roughly $11 per mmbtu.

Nevertheless, on a world scale, futures contracts for LNG in October are buying and selling at $13.32 per mmbtu on the LNG Japan/Korea Marker (JKM), and $10.78 on the Dutch TTF Pure Gasoline index. Though TTF might seem like the optimum buy, you will need to notice that TTF is a bodily pipeline index and should not totally account for the price of liquefying pure gasoline or accessing the pipeline grid. TTF has change into probably the most liquid pricing location in Europe and infrequently serves as a pricing proxy for the general European LNG import market, however this caveat stays.

Trying past October, futures contracts solely enhance in worth, peaking in February for each indexes. Nevertheless, even from February to June, they continue to be above the $11 worth that Gasport is looking for from the spot market. The spot market is often costlier than the futures market, however that doesn’t imply it’s unattainable to realize.

“We often buy at charges decrease than the Japan/Korea Marker. The JKM is usually at a premium in comparison with the Center Jap market, so it’s totally doable to acquire it at a cheaper price than JKM,” Khan asserts.

Nevertheless, there isn’t any certainty as as to whether this may be completed. “It’s unlikely, particularly once you consider country-specific premiums that may apply to Pakistan,” Pasha remarks.

Pakistan presently has entry to LNG at roughly $11-$12 per mmbtu by its long-term contracts, which embrace agreements with Qatar Power, Qatargas II T1, and a current settlement with Azerbaijan.

Nonetheless, Pakistan has not shied away from the spot market. In keeping with knowledge offered by the Worldwide Group of Liquefied Pure Gasoline Importers, Pakistan has obtained LNG cargoes from the spot market from Egypt, Malaysia, Oman, Qatar, the UAE, and the USA.

Nevertheless, when it isn’t the Authorities of Pakistan buying these contracts, it turns into a wholly completely different matter.

Circumventing huge brother 

“It stays to be seen if the federal government permits personal entities to promote to personal events or it requires them to promote to the grid and system. If that’s the case you then’re again to sq. one when it comes to round debt and line losses and theft and so forth,” States Pasha. While the TPA does exist, really going by with third social gathering entry to Pakistan’s gasoline infrastructure is one other matter totally, and one that continues to be to be seen. 

Even when the Authorities of Pakistan have been to permit Gasport to go forward with the contract, and even promote immediately to personal patrons, Gasport would want to deal with Pakistan’s archaic gasoline infrastructure or devise their very own supply mechanism with a view to keep away from Pakistan’s round debt ridden system. 

How is that this deal going by at a time when Pakistan is within the midst of a foreign exchange disaster, and banks are cautious of opening letters of credit score? Gasport says it would make use of a barter system to hold out its commerce. 

Is there a marketplace for this in the event that they pull this off? 

The output from Pakistan’s mature fields is on an inexorable downward trajectory. BMI Analysis paints a grim image, forecasting a gradual decline in gasoline output from 32.39  billion cubic metres (bcm) in 2023 to a paltry 25.59 bcm by 2032. This compels Pakistan to dig deeper into its pockets for LNG imports, a formidable problem given the nation’s stability of cost disaster and the sky-high international gasoline costs.

The inflow of LNG is about to balloon at a compound annual progress fee of almost 10% over the identical interval, escalating from 6.90 bcm to a whopping 16.2 bcm. Intriguingly, the federal government is probably not the lone wolf initiating these imports.

“The present financial quagmire in Pakistan has compelled the Power Ministry’s hand to impose curbs on LNG imports, directing PLL to cut back its purchases. Amidst this backdrop, personal entities discover themselves in a beneficial place to step in and facilitate LNG imports.”,” explains Jawad Majeed, Common Supervisor at Tabeer Power. 

Majeed additional sheds gentle on the potential windfall this association might result in, which might embrace “stemming foreign exchange outflow, stabilising costs, making certain higher availability, and fostering a possible market teeming with contributors sooner or later.”

Because it stands, Pakistan is steeling itself for a grueling winter marked by gasoline provide rationing. Gasoline will probably be doled out thrice each day for cooking to households on account of extreme international trade shortages, as per officers from the nation’s petroleum ministry. Pakistani households can have gasoline at their disposal for 3 hours within the morning, two hours within the afternoon, and three hours within the night. The nation has additionally been grappling with procuring LNG from the worldwide market on account of prohibitive spot costs.

Nevertheless, a light winter in 2022-2023 coupled with diminished gasoline demand in Europe have resulted in storage ranges being considerably greater than traditional. Consequently, futures contracts aren’t buying and selling finally yr’s exorbitant charges.

So perhaps Gasport is into one thing that might shock us all?

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Pakistan is ready to produce gasoline to ships. How did we get right here? 



After a greater than 4 12 months hiatus, Pakistan is ready to recommence gasoline provide to seafaring ships. The change comes after Pakistan’s Nationwide Refinery Restricted (NRL)  introduced they have been profitable  in producing Very Low Sulphur Furnace Oil (VLSFO) this Monday. 

The event is vital as a result of VLSFO is the one gasoline accepted by the Worldwide Maritime Group for world sea voyages. Now that Pakistan’s nationwide refinery has the aptitude of manufacturing this oil for ships will probably be in a position to provide gasoline for freight which may additionally show to be an enormous enhance to the NRL. 

However why precisely has Pakistan been out  of the sport for the previous 4 years and the way has NRL instantly been in a position to produce the internationally accepted gasoline generally known as ‘bunker gasoline’? 

What’s furnace oil? 

Furnace oil, also called heavy gasoline oil (HFO), is a broad time period encompassing fuels utilised to generate movement and warmth, characterised by their notably excessive viscosity and density. The MARPOL Marine Conference of 1973 defines heavy gasoline oil as having a density exceeding 900 kg/m³ at 15°C or a kinematic viscosity surpassing 180 mm²/s at 50°C. These oils include a major proportion of heavy molecules, together with long-chain hydrocarbons and aromatics with in depth, branched facet chains, lending them their distinctive black hue.

Predominantly used as marine gasoline, HFO is at present essentially the most extensively utilised marine gasoline; nearly all medium and low-speed marine diesel engines are designed to function on heavy gasoline oil. Nevertheless, older steam locomotives and oil-fired energy crops additionally harness vitality from heavy gasoline oils.

Heavy gasoline oil is a residual product derived from the distillation of crude oil. The standard of this residual gasoline is contingent on the standard of the crude oil processed within the refinery. To fulfill varied specs and high quality requirements, these residual fuels are blended with lighter fuels reminiscent of marine fuel oil or marine diesel oil. 

A quintessential distinction of heavy gasoline oils lies of their sulphur content material. Per the requirements set by ISO 8217, the higher restrict of their sulphur content material is firmly capped at 3.5%. The principle lessons based mostly on sulphur content material are HSFO, Low Sulphur Furnace Oil (LSFO), VLSFO, and Extremely Low Sulphur Furnace Oil (ULSFO). 


Marine Gas  Most Sulphur Content material 
HSFO  3.5% 
LSFO 1.0%
VLSFO  0.5%
ULSFO 0.1% 


VLSFO is a brand new kind of marine gasoline that was launched in January 2020 to adjust to the Worldwide Maritime Group (IMO) regulation that limits the sulphur content material of ship fuels to 0.5%

The potential good points for NRL 

“From my perspective, the transition in the direction of VLSFO signifies a constructive evolution for the sector. HSFO, now an antiquated and deficit-inducing product, has been obliging refineries to curtail manufacturing ranges,” articulates Fahad Rauf, the distinguished Head of Analysis at Ismail Iqbal Securities.

“VLSFO, a most well-liked alternative of the maritime trade, may emerge as a profitable product. The tangible profit can be contingent on the magnitude of the shift from HSFO to VLSFO,” Rauf elaborates.

The capability of VLSFO to bestow fast alleviation to NRL from the plethora of obstacles beleaguering the refinery sector is noteworthy. The exigency to metamorphose the slate in the direction of merchandise boasting increased margins is intense, significantly in an epoch characterised by stringent regulatory compliance and a focus on the underside line the place each subtlety is consequential.

As well as, refineries are grappling with the duty of procuring funding for his or her brownfield enhancement incentives, that are projected to be unveiled by the federal government within the imminent months. For such large-scale endeavors, the importance of greenback fairness is paramount.

The Pakistan Nationwide Transport Company (PNSC), poised to be NRL’s fast patron, had earlier this 12 months in March formalised a memorandum of understanding with ENAR Petroleum Refining Facility for the acquisition of VLSFO. The main points of the association couldn’t be obtained on the time of writing.

Nonetheless, it  is conceivable that PNSC nonetheless harbours unmet demand that NRL may fulfil. Within the unlikely state of affairs of a disagreement, PNSC can be obligated to stick from a regulatory vantage level, rendering a pact between each entities extremely possible.

At current, NRL holds the excellence of being the solitary main oil refinery engaged within the manufacturing of VLSFO. Pakistan Refinery Restricted had launched into manufacturing two years prior however ceased operations shortly thereafter. Whereas curiosity from varied non-public refineries in producing VLSFO has been noticed, no tangible developments have come to fruition as but.

Continue Reading


Energy Division anticipates a restoration of round Rs 150bn inside 3-4 months



ISLAMABAD: Energy Division has to date recovered appropriately Rs.10 billion throughout its marketing campaign towards electrical energy theft and restoration from energy defaulters, whereas it anticipates a restoration of round Rs. 150 billion inside 3 -4 months.

These details and figures had been introduced by the ability division (Power Ministry) throughout a gathering of the Senate Standing Committee on Energy which met on Tuesday beneath the Chairmanship of Senator Saifullah Abro right here at Previous Pips Corridor, Parliament Lodges.

The Senate Standing Committee on Energy was additionally apprised by the ability division that the electrical energy theft marketing campaign has confirmed to be very fruitful and the ability division was in a position to get well appropriately Rs.10 billion throughout the marketing campaign. It was apprised that the marketing campaign continues in numerous districts and areas of the nation on completely different fashions. The Senate Committee acknowledged the efforts of the ability division and beneficial to offer appreciation certificates to the officers who led the marketing campaign.

The Committee chair beneficial that the restoration ought to be utilized as aid for the folks of Pakistan. The ability division anticipated {that a} restoration of round Rs. 150 billion is predicted inside 3 -4 months.

On the outset of the assembly, Senator Saifullah Abro expressed reservations on the absence of Chairman NEPRA and all its provincial Members from the Committee assembly. He mentioned that NEPRA appears to keep away from the conferences of Senate Energy Committee as a result of they don’t have the braveness to reply the questions raised by the Members on this discussion board.

The Committee chaired instantly sought particulars on the incumbency report of Extra Secretary (AS) Energy Division from January 2021 – December 2021 to find out as to why the Chairman NEPRA is absent from the Committee assembly right this moment and in addition with regard to agenda merchandise pertaining to unlawful extension of KAPCO Energy Plant.

The Chairman Committee inquired on the quantity of vitality cost made to KAPCO Energy Plant whose settlement was already expired in June 2021, the officers replied that Rs. 151 Bn was paid as Power cost to KAPCO Energy Plant out of which 95 computer had been gas costs.

The committee members inquired on the explanations of unlawful extension and mentioned that no matter work between KAPCO Energy Plant and Energy Division came about after the expiry of the settlement might deem to be unlawful. The committee chair mentioned that not even the extension was unlawful however the Energy division doesn’t even maintain the authority to offer extensions to IPPs. Concerning the funds made to IPPs, the officers knowledgeable that beneath coverage 2002 onwards the funds are been paid by NEPRA. The chairman committee inquired that in that case is the case then on which foundation, NEPRA has issued a present trigger discover and sought rationalization on the extension from CPPA-G. The committee deferred the matter for additional deliberation and inquired on the small print of breakup of Rs. 151 billion as vitality cost paid to KAPCO Energy Plant.

The committee additionally sought the advantageous charged to CPPA-G on the identical. The CPPA-G officers additionally briefed the committee concerning the Members of BoD, Kot Addu Energy Firm Restricted members together with its Chairman Lt. Basic (Retd) Sajjad Ghani. The committee sought full particulars concerning the BOD, Members earlier than the subsequent Committee assembly.

The committee whereas deliberating on agenda merchandise relating to the 765 kV double circuit transmission line from Dasu Hydro Energy Station tabled the letter issued by World Financial institution to Energy Division. The letter mentioned that the World Financial institution confirmed that the contract was procured following the World Financial institution Procurement Rules as stipulated within the authorized settlement signed between the World Financial institution and authorities of Pakistan for the US $700 million IBRD mortgage. Nonetheless, the letter mentioned that suggestions relating to the mis-procurement and re-tendering of Lot-1 is inaccurate, the letter identified. The committee apprehended that the ministry (Power Ministry) appears to mis-communicate the target behind acquiring the method particulars strictly in keeping with the WB tips and mentioned that no such particulars are offered which claims that no deviation has occurred which probably result in mis procurement.

The committee chaired inquired from the Energy Division to specify the in accuracies within the Senate suggestions by the World Financial institution. Energy Division mentioned that the NTDC is the procurement company and a committee has already been constituted by NTDC to additional deliberate upon the findings of senate suggestions. The committee chair after thorough deliberation noticed that the idea on which the World Financial institution issued the NOC and termed the venture authorized is simply on the stage sensible data and course of particulars offered by the NTDC.

The committee chair beneficial holding a gathering with the NTDC Board and shutting the matter relating to the mis-procurement of Lot -1 & LoT-II and if the Senate Committee findings discovered incorrect be certain to confess and provides redressal. The committee sought report of the procurement committee inside a fortnight for additional deliberation.

The committee additionally obtained briefing by MD, NESPAK on their consultancy and progress of all tasks in Energy Sector and on ADP venture ACSR bunting conductor Lot -II A.  The chairman committee inquired on the technical expertise required by the M/s Newage Cables Lahore and M/s Henan Tong-Da China. The committee noticed that the expertise of bunting conductor is lacking on the ACSR bunting conductor LoT II A venture in each certified corporations. It was apprised that M/s Newage Cables Lahore emerged because the lowest evaluated substantial responsive on the idea of home desire. The Committee sought total correspondence made between NTDC and NESPAK on the venture to find out the idea of M/s Newage Cables Lahore because the lowest bidder.

The assembly was attended by Senator Bahramand Khan Tangi, Senator Muhammad Asad Ali Khan Junejo Senator Saifullah Sarwar Khan Nyazee, Senator Sana Jamali, Senator Dilawar Khan, Senator Haji Hidayatullah khan and Senator Fida Muhammad.

Continue Reading


Gul Ahmed Textile Mills sees income fall by almost 50% in 2023



Gul Ahmed Textile Mills Restricted (GATM) wrapped up their fiscal yr 2022-23 with an enormous fall in income. This was acknowledged in a consolidated report launched on Tuesday to the Pakistan Inventory Change (PSX) displaying a 50% lower in income, largely pushed by a excessive price of gross sales and finance prices.

The corporate posted a internet revenue of Rs4.88 billion for the yr as in comparison with Rs9.85 billion which was recorded on the similar time final yr. Because of this, GATM’s earnings per share for fiscal yr 2023 dropped from Rs13.30 final yr to Rs6.62 this yr.

This decline in profitability might be attributed to a considerable enhance in finance prices, which rose by 86.57% year-on-year to achieve Rs7.31 billion in fiscal yr 2023. The rise is attributed to a major enhance in rates of interest all year long. The corporate additionally skilled a virtually 17% year-on-year drop in different earnings, which amounted to Rs82.1 crores in fiscal yr 2023, in comparison with Rs986.92 million final yr.

Whereas the textile producer witnessed a 14% progress in whole income, reaching Rs138.93 billion in comparison with Rs121.81 billion within the earlier yr, its revenue margin contracted from 22.2% in fiscal yr 2022 to twenty% in fiscal yr 2023, as a consequence of greater price of gross sales. The corporate’s working bills elevated by almost 19% year-on-year, totaling to Rs14.69 billion in fiscal yr 2023.

Regardless of the worrying numbers, financial analyst A. A. H. Soomro advised Revenue that the outcomes may actually present a promising development on margin enchancment.

“Within the world contractionary section, fetching excessive gross sales is troublesome. That’s seen with low greenback gross sales on a year-to-year foundation. However, regardless of a 40% plus enhance in monetary prices, backside line progress is strong on a quarterly foundation and prone to proceed,” he stated.

The analyst stated heightened competitiveness in export orders is anticipated, as a consequence of substantial home crop, important forex changes – regardless of an increase in vitality bills.

“Gul Ahmed presents a robust mixture of home and export gross sales, and these outcomes ought to consolation buyers on enhancing prospects of unlocking the valuations,” Soomro acknowledged.

In a associated growth, GATM’s Board of Administrators determined to reclassify Rs23 billion from income reserves to separate capital reserves (un-distributable by the use of dividend), reflecting the character of those reserves extra precisely.

It’s pertinent to say that the board, over time, has mentioned the corporate’s enlargement and diversification efforts, together with substantial investments, have elevated enterprise worth for shareholders. Consequently, the unappropriated income are usually not totally obtainable for dividend distribution.

Gul Ahmed Group has been a textile dealer because the 1900s and initiated its manufacturing operations as Gul Ahmed Textile Mills (GATM) in 1953. Subsequently turning into a publicly listed firm in 1955. GATM, a subsidiary of Gul Ahmed Holdings (Non-public) Restricted, is a complete textile mill specializing in textile product manufacturing and gross sales. Past manufacturing, GATM has ventured into the retail sector, with over 40 shops nationwide.


Continue Reading