January 29, 2021 (MLN): Socar Trading, a commercial arm of the State Oil Company of Azerbaijan Republic, has offered a supply of petrol and LNG cargoes to Pakistan LNG Ltd (PLL) and Pakistan State Oil (PSO) round the year on credit under a government-to-government (G2G) arrangement to build upon the strategically friendly relationship between the two countries.
According to Dawn News, a Socar Trading spokesperson told that Azerbaijan is a major producer of oil and gas and operates several oil and chemical refineries in many countries. Socar Trading, which has won the tender and confirmed the delivery of an LNG cargo on Feb 15-16 window, was surprised to hear a reference to default on this delivery as no such action has taken place and the cargo was scheduled to arrive in Pakistan in accordance with the contract.
The spokesperson confirmed that Socar had offered petrol and LNG supplies on a long-term basis. The offer is based on terms that are commercially acceptable to both parties and has never involved unnecessary pressure from any parties.
People familiar with the matter told Dawn News that Socar had not only reconfirmed the bid bond of about US$300,000 and extended it within its validity period but has also submitted a performance guarantee worth US$3.73 million to confirm delivering LNG spot cargo awarded to it by PLL on Jan 7.
On the same date, the UAE National Oil Company (Enoc) refused to deliver LNG at the lowest bid for Feb 23-24 window. Enoc had let its bid bond confiscated on default as it was reported to have found about $13-15 million higher return in the market, Dawn reported.
Enoc’s default caused PLL to negotiate with Socar, the second-lowest bidder, and Gunvor, the third-best bidder, to deliver LNG on February 23 to 24 to make up for the shortfall, but both declined due to a supply shortage in the market. However, Socar confirmed its lowest bid for the February 15 to 16 period, which was also reconfirmed by Azerbaijan’s visiting foreign minister to Islamabad a few days ago as part of engagements with Foreign Minister Shah Mahmood Qureshi.
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