Page 6 - AsianOil Week 05 2023

AsianOil PIPELINES & TRANSPORT AsianOil

Eni unable to make February LNG

delivery to Pakistan

ITALY ITALY’S Eni has announced that it will not be it unable to land an LNG purchase on the spot
able to deliver a contracted volume of LNG to market. Pakistani media reports say that banks
Eni claimed a force Pakistan for the month of February. The Ital- have stopped financing and facilitating pay-
majeure event. ian giant has a 15-year contract from 2017 to ments for some imports due to depleted foreign
2032 with state-owned Pakistan LNG to supply exchange reserves. The country faces a balance
780,000 tonnes per year (tpy). of payments crisis as well as a falling rupee.
However, Eni said its delivery schedule for Oil traders are reported to be avoiding Paki-
energy-strapped Pakistan is disrupted by a stan because of its declining foreign exchange
“force majeure event,” but did not elaborate on reserves. Last week, the government raised the
the cause. Eni said the situation “is beyond the prices of gasoline and diesel as a means of cop-
reasonable control of Eni and due to an event of ing, but this is not expected to accomplish much.
force majeure. Eni does not benefit in any way The government is also trying to secure a bailout
from the situation,” the company said in a state- package from the IMF.
ment that was carried by Reuters. There have also been two major power black-
“All the previous disruptions in LNG deliv- outs that have affected much of Pakistan in
ery suffered by Eni have been caused by the recent months.
LNG supplier who didn’t fulfil the agreed obli- Pakistan has been receiving most of its LNG
gations. Also in these cases, Eni did not take deliveries from Qatar, with which it has two
advantage or benefit in any way from these long-term supply contracts. It receives six car-
defaults and applied all contractual provisions goes monthly from Qatar under a 15-year deal,
to manage such disruption,” the Eni statement and two cargoes from Qatar under a 10-year
said. contract. It also receives one cargo monthly
Eni did not disclose from where it had from Eni. Data available from Refinitiv statistics
intended to secure the delivery for Pakistan, but shows that Pakistan imported 9bn cubic metres
the company is understood to have long-term of LNG in 2022, down by 20% from 11.2 bcm
offtake agreements with LNG facilities in Egypt, in 2021.
Nigeria, Qatar and Indonesia. In late January, Pakistan Minister for Eco-
LNG has become scarce and the price has nomic Affairs Sardar Ayaz Sadiq announced
soared since Russia invaded Ukraine last Febru- that the country had reached an agreement with
ary. Pakistan, which relies heavily on imported Moscow to import Russian crude beginning
gas for power generation, has attempted in the in late March. Russian crude oil is under inter-
last year to secure a new long-term LNG supply national sanctions by Western countries and is
contract, but no company has responded to the being sold by Moscow at a discount to those will
tender, or those issues to purchase LNG on the to run the risk of sanctions. The chances that
spot market. Pakistan could receive LNG from Russia are
Pakistan’s economy is in a dire state, making remote. ™

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