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Pakistan State Oil (PSO) has won about $15 million arbitration award against an international energy trader, Gunvor International BV, for excess port charges on account of liquefied natural gas (LNG) supplies over the past few years.
Pakistan’s state-run fuel supplier and Geneva-based Gunvor signed a five-year contract for the supply of 100 million cubic feet per day (mmcfd) of LNG in 2015-16.
Under the agreement, PSO started payments to Gunvor on account of LNG cargoes along with port charges but kept on asking for reconciliations. It continued making excess payments to the LNG supplier on account of port charges for four and a half years.
Similar charges were also being paid by state-run Pakistan LNG Limited (PLL) to its suppliers. Gunvor had repeatedly defaulted on LNG supply contracts with the PLL, apparently to earn windfall benefits by diverting Pakistan’s contracted cargoes to the spot market at prices, sometimes at triple the price committed to Pakistan, which has been grappling with power outages over the past years.