Pakistan LNG issued SBLCs to international banks to ensure regular payments to international LNG suppliers

Pakistan LNG issued SBLCs to international banks to ensure regular payments to international LNG suppliers

Web Desk
August 29, 2022

Pakistan LNG issued SBLCs to international banks to ensure regular payments to international LNG suppliers

PLL has promised that it will pay international LNG suppliers for spot cargoes on time until December 2028.
PLL refused to change any of the requirements listed in the tender, such as the number of cargos or the length of time the supply would last.

Through standby letters of credit (SBLCs) to international banks, Pakistan LNG Limited (PLL) has promised that it will pay international LNG suppliers for spot cargoes on time until December 2028.

In the next six months, Dawn reported on Monday, PLL, a state-owned entity (SOE), will get one cargo per month, for a total of 72 cargoes.

For this, the company put out bids at the beginning of this month, and the deadline was September 13. But because Pakistan is having problems with its balance of payments, the LNG suppliers asked for payment guarantees or guarantees from the government.

In a statement released by the PLL, the company said that it will get SBLCs from a scheduled bank with a long-term credit rating of at least AA from a reputable international credit rating agency. The company also gave the impression that United Bank Limited could be used to send out letters. PLL also asked the companies that bid to get confirmation of their SBLCs from Morgan, Citi Bank, and Deutsche Bank, among other international banks.

But the company didn’t want to give a guarantee from the Ministry of Finance.

The SOE has also asked the bidders to show proof in writing that they can supply at least one million tons of LNG every year from 2023 to 2028 as part of the tender. Also, the company asked the bidders to show proof that they were a supplier by sending a copy of the bill of lading, the final discharge report, and any other relevant documents.

On the other hand, PLL refused to change any of the requirements listed in the tender, such as the number of cargoes, the price, or the length of time the supply would last.

During the war between Russia and Ukraine, the country has had a serious lack of LNG and has not been able to get any spot cargo for several months. PLL had put out bids for the supply of 12 cargos until December 2023 and the remaining 60 cargos between 2024 and 2028 to try to make up for the shortage.

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