Ogra Cuts RLNG Prices By Up To 22% For September

The Oil and Gas Regulatory Authority (Ogra) has reduced regasified liquefied natural gas (RLNG) prices by around 20% for September after two relatively cheaper LNG cargoes from Qatar lowered Pakistan’s import costs. The reduction is expected to ease fuel costs for power generation.

The average delivered ex-ship (DES) price of the two LNG cargoes received during September was $10.06 per million British thermal units (mmBtu), compared with $12.12 per mmBtu in August and $18.96 per mmBtu in July.

September’s RLNG price is approximately 20% lower than August and 47% below July. During July, Pakistan had to purchase five costly LNG cargoes from the international spot market at short notice amid supply disruptions linked to the US-Iran war.

For Sui Northern Gas Pipelines Limited (SNGPL), the RLNG sale price at the transmission stage declined 19.99% to $13.99 per mmBtu in September from $17.49 in August.

At the distribution stage, SNGPL’s price fell 20.14%, dropping from $19.02 to $15.196 per mmBtu.

Sui Southern Gas Company Limited (SSGCL) also received a significant reduction. Its transmission-stage RLNG price decreased 21.53% to $12.611 per mmBtu from $16.07 in August, while the distribution-stage rate declined 21.57% to $14.22 per mmBtu from $18.13.

Despite the reductions, distribution-stage prices remain considerably higher than the $10.06 per mmBtu average DES cost. SSGCL’s distribution price of $14.22 is around $3.3 higher than the delivered cargo price, while SNGPL’s rate of roughly $15.19 is about $4.2 higher.

The gap is attributed to additional costs across the public-sector LNG supply chain. LNG importers Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL), along with port authorities, impose retainage and profit margins equivalent to 3.77% of the DES price.

System losses also contribute to the higher delivered cost. SNGPL’s distribution-stage losses have increased to 8.97%, compared with 7.47% in October last year. SSGCL’s losses stand at 12.55%, up from around 10.6% last year.

SSGCL supplies gas to consumers in Sindh and Balochistan, while SNGPL serves consumers across Punjab and Khyber Pakhtunkhwa.