According to an analysis by two non-profit groups, Italian oil major ENI has partially reneged on contracts with Pakistan to supply liquefied natural gas (LNG) cargoes over the past two years and sold them to other countries. After earning 550 million dollars.
The Italian company has a 15-year contract with Pakistan under which it has to supply one LNG cargo per month from 2017 to 2032.
However, ENI failed to deliver several scheduled cargoes between late 2021 and early 2023, JEE News reported, citing research nonprofit sources and analysis by Italian environmental group Recmon.
In a joint report, the non-profit organizations said LNG cargoes destined for Pakistan were delivered to Turkey instead.
ENI, which cited an incident of force majeure, told JEE News earlier this year that the company “has not profited or benefited in any way from these defaults and is doing all it can to manage such disruptions.” applied the provisions of the agreement”.
It had also said that previous bottlenecks were caused by the company’s LNG supplier not fulfilling agreed obligations.
Data analyzed by JEE News showed that ENI failed to make at least four out of 12 deliveries in the year to February 2023.
After energy prices spiked last year after Russia’s invasion of Ukraine, countries rushed to buy LNG, boosting demand on the international market and creating shortages in many developing countries, including Pakistan. .
Pakistan rates were a fraction of LNG prices during the height of the crisis and the 30% cancellation fee made it profitable for companies to cancel scheduled cargoes.
However, ENI has denied the report, saying it did not profit from the situation and that any undelivered cargo was “beyond its control”.
“Only where mutually acceptable commercial solutions were not available, did contractual provisions for failed deliveries apply,” it said in its reply.
Meanwhile, the government said “non-delivery of LNG cargo by ENI is a contractual matter covered by confidentiality provisions”.
The reduction in LNG shipments had worsened the country’s gas and power crisis, which led to a price hike in January 2023 amid rising inflation and a nationwide shutdown.
