Page 7 - AsianOil Week 06 2023

AsianOil PIPELINES & TRANSPORT AsianOil

Force majeure issue derails February

LNG cargo to Pakistan

PAKISTAN LEADING Italian energy firm Eni this week has appease its critics.
announced that it cannot deliver a much-needed Making things harder still for Pakistan is the
Coming just a week LNG cargo to Pakistan, claiming a force majeure ongoing difficulty faced by many nations in the
after Islamabad was hit event beyond the firm’s control. south and south-eastern areas of Asia in picking
by nationwide blackouts Coming just a week after Islamabad was hit up spot cargoes at reasonable prices.
following a power- by nationwide blackouts following a power-sav- This issue has been exacerbated in recent
saving venture by the ing venture by the national government that months, with some sources claiming that a
national government went wrong, the failure to dock a much-needed number of suppliers to Asia would prefer to pay
that went wrong, the LNG cargo threatens to extend blackouts in contracted Asian buyers agreed penalties based
failure to dock a much- some areas. on failure to meet delivery commitments at the
needed LNG cargo The cut in power to over 200mn people across same time as redirecting LNG to European buy-
threatens to extend Pakistan was later officially attributed to a volt- ers for higher profits.
blackouts in some age surge in the south of the country. However, in making its own moves to source
areas. The Rome-based Italian energy giant is con- other forms of energy, Pakistani Prime Minis-
tracted to supply one LNG cargo each month to ter Shehbaz Sharif recently met with the energy
Pakistan until 2032, but was noticeably reluctant minister of Russia to discuss the possibility of
to offer details of the force majeure event when Moscow supplying gas and oil to the resource-
news broke. poor nation.
It is understood the current monthly LNG A statement released by the Pakistani
cargo contract supplies Islamabad with 780,000 Prime Minister after the meeting said: “Both
tonnes per year (tpy) of LNG. sides agreed on the importance of (the)
The bulk of the supply was initially planned to energy sector for the development of bilateral
come from Eni interests in Indonesia, although economic and trade relations. In this regard
with only three deliveries arriving from Jakarta views were exchanged on supplying oil and
in the first two years of the contract period, gas from Russia to Pakistan on a long-term
Eni was earlier relying on its Qatar and Nigeria basis.” ™
offtake areas to supply Pakistan.
Pakistan generates around 30% of its total
power output from imported gas cargoes. In
2022, this reliance on gas saw Islamabad import
around 9mn tonnes.
Of that total, around 6.4mn tonnes came
from Qatar, according to oil analysts.
An additional 250,000 tonnes was imported
from Nigeria, together with a lone cargo from
Egypt.
Early 2023, LNG imports meanwhile have
continued to come from Qatar, with one stand-
out cargo arriving from Indonesia, the first LNG
cargo received direct from Southeast Asia’s lead-
ing energy exporter in three years.
“February LNG delivery disruption is beyond
the reasonable control of Eni and due to an event
of force majeure. Eni does not benefit in any way
from the situation,” a statement released by the
company said.
To date, no further press release has been
forthcoming from Eni, leading to speculation in
the region that ongoing issues with supplies from
its own operations in north-east Indonesia could
be behind the failure to deliver.
“All the previous disruptions in LNG deliv-
ery suffered by Eni have been caused by the LNG
supplier who didn’t fulfil the agreed obligations.
Also, in these cases, Eni did not take advantage
or benefit in any way from these defaults and
applied all contractual provisions to manage
such disruptions,” the firm added in an effort to

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