PSO was awarded $14.6 million, as well as other costs, on October 8 for the case initiated by Gunvor in 2020.
By Staff Reporter
KARACHI: State-run Pakistan State Oil (PSO) has won an arbitration case against international energy trader Gunvor Group Ltd. regarding excess payments for natural gas shipments, Bloomberg reported on Wednesday.
The London Court of International Arbitration sided with the Pakistani company, which had reduced payments to Gunvor due to overcharged shipments, people with knowledge of the matter said. PSO was awarded $14.6 million, as well as other costs, on October 8 for the case initiated by Gunvor in 2020.
Gunvor declined to comment, while Pakistan State Oil didn’t immediately respond to a request for comment.
The South Asian nation is grappling with blackouts amid a global energy crunch, with contracted LNG suppliers — such as Gunvor — often canceling promised shipments.
It is worth mentioning that PSO had signed a short term LNG contract with Gunvor for the supply of 100 mmcfd for a period of five years. Later, the Pakistan LNG Limited (PLL) also floated tenders for short term and long term contracts for supply of 100 mmcfd supply each, which were also bagged by Gunvor.
Similarly, the PLL also floated a tender for a long term supply contract which was won by an Italian firm, Ente Nazionale Idrocarburi (ENI), which had quoted the lowest price of 13.37 per cent of Brent to win a contract with PSO.
The PSO continued making excess payments to Gunvor on account of port charges for four and a half years; however, the PLL management later pointed out that Gunvor was receiving excess payments.
A legal opinion was sought from an international firm that had assisted Pakistani firms in finalising LNG supplies agreement with Gunvor.
Upon availability of the final port charges, the PLL, on November 9, 2018, notified Gunvor regarding the miscalculations applied by Gunvor in provisional invoices. The PLL followed up on the issue on August 10, 2020, to resolve this matter again.
PSO deducted the excess payment and subsequently, Gunvor filed a case against the PSO in an international court.
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