ISLAMABAD: With system losses touching a record 14.5 per cent, the Oil and Gas Regulatory Authority (Ogra) on Friday notified about 10pc increase in the sale price of Regasified Liquefied Natural Gas (RLNG) for two Sui gas companies – SSGCL and SNGPL — for the current month with effect from Dec 1 owing to higher international prices, particularly of two spot cargoes.

The RLNG sale price for Karachi-based Sui Southern Gas Company Ltd has been jacked up at transmission stage by 10.1pc to $13.264 per mmBtu from $12.05 per unit in November and $11.47 per mmBtu in October. The sale price at distribution stage was raised by 10.11pc to $15.45 per unit for December against $14.034 per mmBtu in November and $13.36 per mmBtu in October.

Likewise, the RLNG’s sale price for Lahore-based Sui Northern Gas Pipelines Ltd has been increased by 9.74pc to $13.68 per mmBtu at transmission stage from $12.47 per mmBtu in November and $11.86 in October. The sale price at distribution stage for SNGPL was jacked up by 10.77pc to $14.8 per mmBtu, compared to $13.49 per unit in November and $12.84 per mmBtu in October.

The overall increase in absolute terms for SSGC’s transmission price amounted to $1.22 per mmBtu and $1.42 per unit at distribution point. The increase in RLNG price for SNGPL at transmission stood at $1.2 per mmBtu and $1.32 per unit for distribution.

The major reason behind lower RLNG prices for SNGPL despite its larger distribution network and greater distance from ports when compared to SSGCL, according to Ogra’s tariff sheet, is the significantly higher system losses of the SSGCL. Ogra said the SSGCL’s transmission and distribution system losses, commonly described as unaccounted for gas (UFG), stood at 14.48pc in December compared to 8.61pc of SNGPL’s network.

This included SSGCL’s distribution loss at 14.36pc and transmission loss at 0.12pc while SNGPL’s distribution losses stood at 8.23pc besides 0.38pc of transmission losses.

Ironically, the RLNG distribution prices for SSGCL at $15.45 per mmBtu and for SNGPL at $14.81 per mmBtu are almost $4.1 and $4.8 per mmBtu higher than the Pakistan State Oil’s average delivered ex-ship (DES) prices, respectively. This is mainly because both the LNG importers — PSO and Pakistan LNG Ltd (PLL) — also charge profit margins on account of retainage and margins at the rate of 3.15pc and 3.1pc of DES price, respectively, on top of 8.6pc losses of SNGPL and14.5pc losses of SSGCL.

The basket RLNG price was based on a total of 11 cargoes for December, eight under the two LNG contracts with Qatar at $10.68 per mmBtu and another cargo from a private supplier at $10.64 per mmBtu – also under long-term contract — and two other ships through spot cargoes at $15.97 and $15.7 per mmBtu at import stage — delivered ex-ship (DES).

This included the cost of LNG delivery ex-ship of five cargoes from Qatar under the first LNG contract worked out at $10.72 per mmBtu at the rate of 13.37pc of Brent. The cost of three cargoes under the second contract also from Qatar were priced DES at $8.94 per mmBtu at the rate of 10.2pc of Brent. Another cargo imported by PLL was priced at $10.64 per mmBtu as it is indexed at the rate of 12.14pc of Brent. The average DES price of three PLL’s cargoes amounted to $14.1 per unit compared to the average price for eight cargoes of PSO at $10.64.

Ogra said it had increased the prices in line with policy guidelines issued by the federal government through the Ministry of Energy.

Published in Dawn, December 23rd, 2023