ISLAMABAD The Oil and Gas Regulatory Authority (Ogra) announced on Thursday that the cost of selling of Regasified Liquefied Natural Gas (RLNG) for SSGCL and SNGPL for the current month will be reduced by up to 9 percent, beginning February 1, due to lower worldwide pricing, despite system losses reaching a staggering 14.5%.
For the second consecutive month, RLNG prices have decreased. In December 2023, the price increased by 10%, but it had since decreased by 8%.
Sui Southern Gas Company Ltd (SSGCL), based in Karachi, has seen a 9.02 percent reduction in the RLNG sale price at the transmission stage, from $12.229 mmBtu in January to $11.126 mmBtu. In December, the company’s transmission stage rate was $13.264 per unit. The company’s distribution stage sale price dropped by 9.03 percent to $12.96 per mmBtu, from $14.245 in January 2023 and $15.45 in December 2023.
Similarly, the RLNG’s sale price for Sui Northern Gas Pipelines Ltd., a Lahore-based company, was cut by 8.72 percent to $11.55 per mmBtu for February at the transmission stage as opposed to $13.68 in December and $12.65 per mmBtu in January. In February, the SNGPL distribution stage sale price was reduced by 8.75 percent to $12.49 per unit, from $13.67 in January and $14.8 in December.
The transmission price of SSGC decreased overall in absolute terms by $1.1 per mmBtu and $1.29 per unit at the distribution point. For SNGPL, the decrease in RLNG price at transmission was $1.1 per mmBtu, and for distribution, it was $1.2 per unit.
According to Ogra’s tariff sheet, the main cause of SNGPL’s lower RLNG prices notwithstanding its larger distribution facility and farther distance from ports than SSGCL is the latter’s much higher system losses.
Unaccounted-for-gas (UFG) losses in the SSGCL’s transmission and distribution system were 14.48 percent, according to Ogra, while the SNGPL’s network losses were 8.61 percent.
This includes 14.36 percent distribution losses and 0.12 percent transmission losses for SSGCL and 8.23 percent distribution losses and 0.38 percent transmission losses for SNGPL.
Strangely, the average delivered cost ex-ship (DES) of $9.36 per mmBtu for Pakistan State Oil is about $3.36 and $3.13pc higher than the RLNG distribution pricing for SSGCL ($12.96 per mmBtu) and SNGPL ($12.49 per mmBtu), respectively. This is mostly due to the fact that, in addition to the 8.6 percent losses incurred by SNGPL and the 14.5 percent losses incurred by SSGCL, both LNG importers, PSO and Pakistan LNG Ltd (PLL), further impose profit margins because of retainage and margins at the rate of 3.15 percent and 3.1 percent of the DES price, respectively.
Ten cargos in total for February, compared to twelve in February and eleven in December, determined the basket RLNG price. Eight of these were under the two LNG agreements with Qatar, with an average price per mmBtu of $9.36; four of them were at $10.62 and the remaining four were at $8.1. PLL imported two additional cargos that arrived ex-ship at $9.64 and $10.77, respectively, with an average of $10.21.
According to Ogra, the price increases were made in compliance with directives from the federal government’s Ministry of Energy.
SOURCE: DAWN NEWS
