Italian energy company unable to deliver LNG cargo to blackout-stricken Pakistan

Italian energy major Eni has warned it would not be able to deliver an LNG cargo to Pakistan in February due to circumstances outside its control.

Eni has a long-term contract with Pakistan to deliver one LNG cargo per month over the period between 2017 and 2032, but this time, the company said, things were outside its control, Oilprice.com reports.

“February LNG delivery disruption is beyond the reasonable control of ENI and due to an event of force majeure. ENI does not benefit in any way from the situation,” the Italian company said, as quoted by Reuters.

 “All the previous disruptions in LNG delivery suffered by ENI have been caused by the LNG supplier who didn’t fulfill the agreed obligations. Also, in these cases, ENI did not take advantage or benefit in any way from these defaults and applied all contractual provisions to manage such disruptions.”

Pakistan, like other poorer Asian nations, has been finding it hard to procure the LNG it needs on spot markets amid surging prices last year because of the European gas shortage. Yet long-term contracts have failed such importers, too, as some companies have preferred to pay the price of breaching them but ship the gas to Europe, which was paying top dollar for deliveries.

Plagued by power shortages for months now, earlier this week, Pakistan experienced a massive blackout that plunged more than 200 million people into the dark. The blackout was caused by a grid failure, itself the result of a voltage surge in the southern part of the country, Reuters reported at the time.

This was the second massive power outage to affect Pakistan in the last three months. Pakistan generates a third of its annual power output from imported natural gas. Last year, Reuters said, Pakistan imported 9 million cu m in the form of LNG, which was down by almost 20 percent from the previous year’s LNG imports.

Pakistan recently discussed gas deliveries from Russia during a meeting between Pakistan’s Prime Minister and Russia’s Energy Minister that ended with a preliminary agreement on oil and fuel supplies for the Asian nation.