The Pakistan State Oil Company has been awarded $14.6 million (or PKR 3.18 billion) in an arbitration case against international energy trader Gunvor Group Ltd. regarding excess payments for natural gas shipments.

The London Court of International Arbitration sided with the Pakistani company, which had reduced payments to Gunvor due to overcharged shipments, Bloomberg reported Wednesday citing people with knowledge of the matter.

“PSO was awarded $14.6 million, as well as other costs, on Oct. 8 for the case initiated by Gunvor in 2020,” reported Bloomberg.

Contract

PSO had a multimillion-dollar contract for three liquefied natural gas (LNG) consignments to Guvnor, the world’s fourth largest commodities group, in 2015. The decision raised several eyebrows as Gunvor was the only one among the nine bidders that submitted tenders to have its technical bid approved. This meant that the state oil provider had no other bid to compare Gunvor’s financial bid.

It was during the tenure of the PML-N government that the private sector was involved in setting up LNG terminals in Pakistan. The government at the time involved state companies like the PSO and the Pakistan LNG Limited (PLL) in the LNG supplies business.

PSO signed a contract for supply of 500 million cubic feet per day (mmcfd) from Qatar for a period of 15 years. It had also signed a short term LNG contract with Gunvor for supply of 100 mmcfd for a period of five years.

Guvnor is the world’s fourth largest commodity trading company. It is registered in Cyprus with its main trading office located in Geneva, Switzerland.