OGRA cuts RLNG prices by 20% on cheaper Qatar cargoes
Lower-cost LNG imports push down September rates for SNGPL and SSGC
The Oil and Gas Regulatory Authority (Ogra) has lowered the prices of regasified liquefied natural gas (RLNG) for September by about one-fifth, with cheaper LNG cargoes from Qatar helping bring down the overall cost of imported gas.
Under Ogra’s latest notification, the RLNG price for Sui Northern Gas Pipelines Ltd (SNGPL) at the transmission stage has been set at USD 13.99 per million British thermal units (mmBtu) for September, down from USD 17.49 per mmBtu in August.
The rate at the distribution stage has also declined. The RLNG price applicable to Sui Southern Gas Company Ltd (SSGC) fell to USD 15.196 per mmBtu from USD 19.02 per mmBtu a month earlier.
The lower rates are largely linked to the cost of LNG cargoes imported during September. The average delivered ex-ship price of the two cargoes stood at USD 10.06 per mmBtu, considerably below the USD 12.12 per mmBtu recorded in August and USD 18.96 per mmBtu in July.
The decline in imported LNG costs could provide some relief to sectors that depend on RLNG, particularly power producers that use the fuel for electricity generation. The extent to which the lower cost translates into consumer relief will depend on the applicable pricing and adjustment mechanisms.
SSGC operates the gas distribution network in Sindh and Balochistan. Its distribution losses have risen to 12.55%, compared with around 10.6% reported a year earlier.
SNGPL supplies consumers in Punjab and Khyber Pakhtunkhwa. Its distribution losses were reported at nearly 9%, compared with 7.47% in October last year.
The monthly RLNG price is influenced by the cost of imported LNG cargoes and other components associated with bringing the fuel into Pakistan and supplying it through the gas network.
The September reduction therefore reflects the lower cost of recent LNG procurement, with the two Qatar cargoes costing substantially less than cargoes recorded in the preceding two months.
