Business

Winter blues: Consumers may get gas for 6 hours only in Jan

Published

10 months ago

Farwa

LNG cargo from SOCAR may not reach in January 2024.
Gas shortfall to escalate to 470 MMCFD in same month.
Distressed LNG availability has become difficult: official.

ISLAMABAD: As winter approaches in Pakistan, the country is likely to face a severe gas crisis as the LNG cargo from Azerbaijan’s state-owned company, SOCAR, may not reach in January 2024, the officials of energy ministry told The News.

Before the impending non-provision of LNG cargo, the country was estimated to brave the gas shortfall of 360 million cubic feet per day (MMCFD) in the next month of December 2023, which will escalate to 470 MMCFD in January 2024 despite restricting the gas availability to the domestic sector just for 8 hours at cooking times only.

Now the expected non-availability of SOCAR cargo would further aggravate the gas crisis in January and force the government to reduce gas availability to the domestic sector from eight hours to just six hours.

“The vibes coming in from SOCAR suggest that it may not be able to offer the price of distressed LNG cargo for January,” relevant officials said.

During the previous government tenure headed by the then premier Shehbaz Sharif, a GtG deal was made with Azeri firm SOCAR, under which it is bound to provide one LNG cargo a month.

Pakistan and Azerbaijan on July 25, 2023, inked an agreement for one year, which is also extendable to another year. Under the agreement, SOCAR Trading Company-UK will offer one LNG cargo 45 days before the start of the relevant delivery window, and each offer for the cargo will have a set validity period during which PLL may accept the offer.

SOCAR seems evasive from offering the LNG cargo for January as the Western economies have started showing buoyancy, and distressed LNG availability has become difficult, the official opined, adding that the Azeri firm is bound to offer 45 days before the delivery of the cargo.

The time is still there and SOCAR may come up with the offer for January 2024, said the official.

Pakistan LNG Limited (PLL) is also planning to market its tenders for spot cargoes for January but PLL has sought the PPRA rules exemptions from the two issues, one from 30 days response time and the second from 15 days bid validity time.

So far, the process is underway. Once, the exemptions are granted, PLL will go for tenders seeking spot cargos for January and it would have to respond and decide the same day after some hours.

When asked if the LNG trading companies would come up with bids for January like before, the government purchased one cargo from Vitol based on its lowest bid.

However, the PLL purchased one cargo from SOCAR keeping its price 10-20 cents less than the lowest bid of Vitol. The market players believe that the bids were used last time to purchase one LNG cargo from SOCAR. The official said the impression was wrong, as SOCAR had offered its price separately under its process.

The government functionaries had earlier worked out that the gas deficit of 160 MMCFD would stay in December and 170 MMCFD in January in the Sui Southern System. However, in Sui Northern’s system, the gas deficit would be at 200 MMCFD in December and 300 MMCDF in January, and the gas shortfall will remain in December at 360 MMCFD which will increase in January to 470 MMCFD.

However, in January, the gas crisis may increase because of the non-availability of LNG cargo from SOCAR. The officials said that from January 2024, Pakistan will start getting four-term cargo at 10.2% of the Brent from Qatar instead of three cargoes. The country is already getting five cargoes from the same country at 13.37% of the Brent at terminal one. ENI is also providing one-term cargo at 12.05% of the Brent price.

Since the demand for gas in Sui Northern goes up to 1,100 MMCFD, and 960 MMCFD in January, Pakistan needs two more spot cargos in the month. This seems difficult as the bidders will come up with inflated prices keeping in view their last bids experience. The local gas production has reduced to 3.19 bcfd, decreasing by 9-10% every year.

Business

Report: Solar is expected to set new records this year.

Published

8 hours ago

Farwa

In 2023, there was an expected 87% increase in growth. This year’s increase is 29% over the previous one, according to the research.

The cheapest source of electricity globally is solar power, and as such, it is expanding quicker than many anticipated, according to Euan Graham, an Ember electricity data analyst.

Ember estimates demonstrate the rapid growth of solar energy: in 2024 alone, new solar capacity will surpass the 540 GW of additional coal power added globally since 2010.

Expected to add 334 GW, or 56 percent of the global total in 2024, China continues to lead the globe in this industry.

According to the survey, it is followed by the US, India, Germany, and Brazil. These five nations will account for 75% of the new solar capacity in 2024.

According to the research, maintaining the sector’s growth required grid capacity and battery storage.

“Providing enough grid capacity and developing battery storage is critical for handling electricity distribution and supporting solar outside of peak sunlight hours as solar becomes more inexpensive and accessible,” the statement stated.

“Solar power might continue to surpass forecasts for the remainder of the decade if these issues are resolved and development is sustained.”

Business

The PSX has resumed operations, achieving a gain of 970 points.

Published

1 day ago

Farwa

The optimistic close at the PSX was propelled by rumors preceding the International Monetary Fund (IMF) executive board meeting on September 25, at which the approval of a $7 billion Extended Fund Facility (EFF) is expected, stated Ahsan Mehanti of Arif Habib Commodities.

Strong economic indicators, such as increasing remittances, escalating exports, and a declining trade deficit, further bolstered investor confidence. Furthermore, the Asian Development Bank’s (ADB) commitment to a $2 billion yearly concessional loan until 2027, along with a robust rupee, significantly contributed to the market’s favorable performance, he stated.

Widespread purchasing at the PSX was noted among blue-chip stocks, with major players like Mari Petroleum (MARI), Engro Fertilizers (EFERT), United Bank Limited (UBL), Meezan Bank Limited (MEBL), and Fauji Fertilizer Company (FFC) recording substantial increases. According to Topline Securities, these stocks collectively resulted in a significant 682-point increase in the index.

Pioneer Cement Limited (PIOC) announced its fiscal year 2024 results, revealing a profits per share (EPS) of Rs 22.79 and a cash dividend of Rs 10 per share. This announcement contributed to the favorable sentiment in the market.

Trading volume surpassed 400.2 million shares, resulting in a total turnover of Rs15.9 billion. Worldcall Telecom Limited (WTL) topped the volume chart, transacting more than 32.2 million shares.

The Large Scale Manufacturing Index (LSMI) demonstrated a year-on-year (YoY) gain of 2.4% in July 2024. This expansion was propelled by multiple critical areas.

Tobacco experienced a significant increase of 90.2%, establishing it as the foremost contributor to the LSMI growth. Conversely, the automotive sector witnessed a substantial increase of 72.0%, indicating robust demand and output.

The transport equipment category experienced an 11.7% increase, signifying robust growth in the manufacturing of transport-related machinery and equipment. The other manufacturing sector experienced a gain of 10.7%, positively impacting the overall LSMI.

Nevertheless, not all industries exhibited strong performance. The leading decliner was the fabricated metal sector, which experienced an 18.4% decrease, signifying a contraction in metal product manufacturing. The electrical equipment industry experienced a substantial decline of 19.4%, indicative of reduced output levels.

In July 2024, the LSMI decreased by 2.1% on a month-on-month (MoM) basis. This fall signifies a minor contraction in manufacturing operations relative to the preceding month, although the favorable year-on-year growth.

Business

As of August 2024, Pakistan’s current account is in surplus.

Published

1 day ago

Farwa

Pakistan’s current account deficit was $161 million as of August 2023, according to figures from the central bank.

The current account deficit for the months of July and August of this year was $171 million, compared to $939 million for the same time in the previous fiscal year.

According to experts, the 40% rise in remittances is the primary cause of the current account surplus.

August saw US$ 2.9 billion in offshore remittances to Pakistan, according to experts.

Comparing July of this year to July of last year, total exports increased by 11.3% YoY to $3.01 billion. In contrast to the $3.08 billion in exports the month before, it decreased by 2.2%.

Compared to the $4.99 billion in imports recorded in July of previous year, total imports increased 12.2% YoY to $5.6 billion. Imports decreased by 1.3% over the previous month.