PLL allegedly used the price offered by SOCAR as a tool to reduce the offer price from the lowest bidder
- Chief Minister Kakar seeks a report from the petroleum secretary on the matter.
- The petroleum ministry is making new SOPs for gas procurement.
- The official admits that the PLL panel played foul to reduce the price of the cargo.
ISLAMABAD: Caretaker Prime Minister Anwaar-ul-Haq has taken note of the reported privacy breach by Pakistan LNG Limited (PLL) that could jeopardize the LNG cargo deal with Azerbaijan.
Chief Minister Kakar also asked the petroleum minister to look into the matter and asked for a report on the matter, The news reported on Tuesday.
“Yes, the prime minister has taken seriously the breach of privacy that may jeopardize the GtG agreement with Azerbaijan and to that end, top officials in the ministry have been kept busy and spent the day trying to find out why it happened.” officials of the Ministry of Energy confirmed.
Energy Minister Mohammad Ali is also accompanying the prime minister during a visit to the United Arab Emirates (UAE) and the report will be submitted to the minister who will then brief the prime minister on the matter, they added.
The official said that the ministry is now in the process of creating new SOPs for the purchase of natural gas through tenders and in the future, it will not use the price from SOCAR — Azerbaijan’s state-owned company — under the GtG agreement to negotiate the price of the bidder.
He admitted that PLL’s board and management fouled up by using the price offered by SOCAR under the GtG contract to further reduce the price of the LNG cargo from the bidder. This will lead to mistrust not only among LNG trading companies but also with the friendly country of Azerbaijan.
The official said that the PLL board and its management have taken this wrong decision collectively, so no one personally will be corrected for this wrong decision. The decision helped save Rs 800 million but caused mistrust between LNG trading companies and Azerbaijan’s SOCAR with which PLL has a GtG agreement for LNG cargo per month.
Referring to the senior executives who participated in the bidding process, The news reported that the LNG deal with Azerbaijan’s SOCAR may hit hurdles due to a breach of confidentiality as PLL used the price offered by SOCAR as a tool to lower the bid price from the lowest OQ bidder, which was in $18.46 per MMBtu. However, the price was still higher than the previous spot cargoes procured by Pakistan LNG Limited.
The PLL Board of Directors met after the bids were opened and decided to contact SOCAR for its bid for the January LNG cargo.
In return, SOCAR offered the LNG price at $17.96 per MMBtu, but PLL management smartly contacted OQ trading and informed them of SOCAR’s offer, which was under GtG and not the bidding process.
He asked the bidder to match SOCAR’s offer. The OQ deal revised its offer down to $17.95 per MMBtu from SOCAR’s bid of less than one cent. This is how PLL managed the January LNG cargo at $17.95 using SOCAR’s price as a tool to negotiate with the highest bidder.
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