Geneva-based energy trader Gunvor has resolved a dispute with state-owned Pakistan LNG over issues related to contracted LNG supplies.
“Gunvor and Pakistan LNG Limited confirm they have now settled all outstanding legal proceedings on terms satisfactory to all concerned,” Gunvor said in a statement on Thursday.
“The parties look forward to continuing to work together,” it said.
Gunvor added that the terms and details of the settlement are subject to confidentiality agreements.
The trader did not provide any additional information.
LNG supply deal
Gunvor and Pakistan signed a five-year contract in 2017 for some 0.78 mtpa per year or 12 LNG cargoes per year.
In March 2022, several reports said that Gunvor told Pakistan LNG that it would not be able to deliver four contracted cargoes in April-June.
During this period, spot LNG prices reached record highs over tight supply due to the Russia-Ukraine war, and Europe was attracting a huge amount of spot LNG shipments, mostly from the US.
Pakistan LNG issued a tender in March 2022 for two spot LNG cargoes in April-May and received offers for cargoes priced at $34.6777/MMBtu and $33.5300/MMBtu,
For comparison, JKM, the price for LNG cargoes delivered to Northeast Asia, for May settled at $9.400/MMBtu on Wednesday.
Following these canceled shipments, Pakistan LNG then reportedly filed for arbitration with the London Court of International Arbitration (LCIA) claiming Gunvor failed to meet the contractual obligations.
Gunvor previously said it has not defaulted on obligations to supply LNG to Pakistan.
Two LNG terminals
Pakistan currently imports LNG via two FSRU-based LNG import terminals in Port Qasim.
The country’s first terminal started operations back in 2015 utilizing Exclerate’s FSRU while the second floating LNG import facility uses FSRU BW integrity.
Pakistan gets most of its supplies under long-term contracts from Qatar, but also from the spot marker when the prices are affordable for the country to fuel its power plants.
The country also has a 15-year deal with Italy’s Eni for 0.75 mtpa per year and this contract also started in 2017.
In July last year, Pakistan also signed a one-year deal to buy one LNG cargo per month from Azerbaijan’s Socar.