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[Thread] Ref. media reports posing serious questions pertaining to LNG import based on 'selected data', is strongly rebutted by this Division & wud like to respond to these questions in backdrop of legal & contractual issue of LNG import, which are as follow: 
2. Why GoP not buying more LNG? In this regard, one must know tht since LNG is not “gas” as per law, govt. can only buy more LNG when confirmed buyers are available who will pay the full price. Otherwise, it will create a LNG circular debt...
3... LNG under contracts is Take or Pay whn a spot cargo is procured, it becomes Take or Pay. Each cargo is approx. $25 m in value. Using financial prudence, govt. is buying add. volumes above 800mmcfd of prior contracts based on demand frm Power, CNG & portion of Industry.
4. Secondly, Q. is asked about construction of more LNG terminals, it is clarified tht existing terimals were built on public money. GoP has paid billions of rupees in charges for unutilized capacity in last 4 yrs.If present govt. build terminals on same financial model,..
5. It will pose burden of national exchequer. Instead, present govt. opened up sector to private investors with no financial commitment on the part of GoP. Two of companies are moving forward & one is likely to break ground within 2 months, w/ other to follow shortly thereafter.
6. Third Q. was why did GoP not sign more long-term LNG contracts, it is must be understood tht govt. hv to ensure tht we can sell full exceeding 800mmcfd every month before we can commit to more long-term contracts. Otherwise, it will be releasing LNG in the air.
7. Fourth Q. based on why was more LNG not bought in summer 2020 for winter demand, so that we cud hv saved billions, for this: spot cargoes prepared for delivery within 30-60 days. Whereas in forward buying (ie order today for delivery much later), the pricing for such purchases
8. is being undertaken on a forward curve for Brent & Swap Spreads for slope. So, if spot cargoes were available in July for 10% of Brent, resulting in $4/mmbtu delivered price, an order placed in July for delivery in Dec. doesn't get priced at $4/mmbtu.
9. Fifth Q. was regarding recent LNG Spot Purchases by the GoP for December, it must be known tht global demand of LNG goes up dramatically in winter compared to summer. It is a natural phenomenon that summer spot prices are lower and winter prices are higher.
10. Even ignoring the current winter season, the range of spot prices we have seen in our tenders in the last one year spanning a winter and a summer has been at a slope of as low as 5.8% and as high as 15.78%.
11. It must be noted tht from Sep 2018 to Nov 2020, a total of 35 spot cargoes were bought by GoP w/ an avg. spread of 10.4% of Brent compared to 13.37% of Brent old contracts. Even if high of Dec. 2020 is added, spot avg.still come to only 11.3%
12. Sixth Q. Sixth question was about why was enough LNG not ordered in summer resulting in 2 extra cargoes being ordered, it is pertinent to mention here tht spot cargoes are ordered once firm demand is available to PLL showing need for going above 800mmcfd, as explained above.
13. Seventh Q. was on priority of RFO on LNG alleging on govt. for not provided cheap LNG to NTDC resulting in them running some plants on high cost RFO, it is clarified that as for K.E, ECC allocated them 190mmcfd of gas in April 2018. Gas allocations to Power & Fertilizer
14. require specific identification of the source. However, in a typical style of previous govt., an allocation was made without identifying where this add. gas wud come from, or who wud be cutoff, or even ensuring an agreement for this supply.
15. Whn load shedding hit Karachi in summer 2020, & KE didn't have enough RFO in stock, some LNG ordered for NTDC was diverted to KE thru SSGC’s sys. This resulted in replacement of tht capacity in NTDC sys w/ RFO for about 2 months until emergency cargoes of LNG were delivered
16. As of end of November, the total generation on RFO in the NTDC system in 11 months is less than 3.5% of total generation. In FY 2017-18, the last year of previous government, RFO generation stood at [21%].
