K-Electric has put forward a K-Electric PLL payment of Rs5.729 billion to Pakistan LNG Limited (PLL) in nine monthly instalments under protest, aiming to halt moves to encash standby letters of credit (SBLCs—bank guarantees that can be drawn if a bill is unpaid) and to secure a waiver of late payment surcharge (LPS).
In a message to PLL, KE Chief Financial Officer Aamir Ghaziani offered Rs636.5 million a month from October 2026 to June 2027 against the differential linked to May and June 2026, when PLL brought in spot LNG cargoes for the power utility. The company framed the plan without admitting liability and said the final price of re-gasified LNG (RLNG) supplied during the force majeure period still depends on determination and implementation of the Unified/Weighted Average RLNG Pricing Mechanism agreed by the government.
Court stay after SBLC demands
The proposal follows PLL’s demands of 16 October 2026 to Habib Bank Limited and Faysal Bank Limited for encashment of SBLCs totalling about Rs5.729 billion, after which KE went to court. Through an order of 19 October 2026 in Suit No. 2533 of 2026 ("K-Electric Limited vs Pakistan LNG Ltd & Others"), the Sindh High Court restrained PLL and the two banks from coercive steps against KE, including encashment of those SBLCs, Ghaziani said.
KE argues that pricing remains unsettled and that substantial credits are owed to it by PLL. Under its latest offer, the Rs636.5 million instalments would depend on withdrawal of the SBLC encashment notices and confirmation that no LPS would be levied. Any amounts paid would also be adjustable against the final figure once the Unified RLNG Pricing Mechanism is applied. KE stressed that payment would be under protest and without prejudice to its stance on the disputed RLNG price and outstanding credits.
Why the RLNG price is contested
According to KE, after Force Majeure was declared, RLNG supplied to the utility mixed spot and long-term LNG cargoes. Spot cargoes were imported at the direction of the Government of Pakistan to meet nationwide needs. PLL, however, billed KE entirely at spot rates—a position the utility disputes.
KE has maintained that the cost of spot LNG should be shared fairly among all consumers and off-takers nationwide by consumption, not charged only to those supplied through spot cargoes. On 1 July 2026 the National Coordination and Management Council (NCMC) agreed to a Unified/Weighted Average RLNG Pricing Mechanism for supplies under the Force Majeure conditions; PLL conveyed that decision in a letter dated 3 July 2026. KE says the mechanism has still not been put into effect, so disagreement over the applicable RLNG price and unpaid dues continues.
The utility says it has been paying on the basis of the actual gas mix—spot plus long-term cargoes. On that basis, and on the price it expects once the agreed mechanism is applied, KE estimates it has already paid about Rs4.2 billion too much and expects a matching credit note from PLL. Separately, it points to another Rs5.7 billion credit linked to earlier RLNG price notifications for supplies between February 2025 and April 2026. For part of that stretch, PLL had not imported its own LNG and supplied KE with RLNG bought from Sui Northern Gas Pipelines Limited (SNGPL). KE cites PLL’s letter of 14 May 2026 in support of that pending Rs5.7 billion credit. It says these adjustments remain unsettled even as PLL presses payment demands.
Timeline: what has happened so far
- February 2025–April 2026: KE cites a pending Rs5.7 billion credit on earlier RLNG price notifications; for part of the period, supply came via SNGPL-sourced RLNG.
- 14 May 2026: PLL letter that KE says supports the Rs5.7 billion pending credit.
- May–June 2026: PLL imported spot LNG cargoes for KE; the disputed differential behind the current payment plan relates to this period.
- 1 July 2026: NCMC agrees a Unified/Weighted Average RLNG Pricing Mechanism for Force Majeure supplies.
- 3 July 2026: PLL communicates that decision by letter; KE says the mechanism is still not implemented.
- 16–19 October 2026: PLL seeks SBLC encashment of about Rs5.729 billion from Habib Bank and Faysal Bank; the Sindh High Court then restrains coercive action, including encashment.
Aasan alfaaz mein
K-Electric ne Pakistan LNG Limited ko protest ke saath Rs5.729 arab denay ki offer ki hai, nau mahine mein. Har mahine lagbhag Rs636.5 million, lekin pehle bank guarantees cash na ki jayein aur late fee na lage. Masla RLNG ke rate ka hai jo Force Majeure ke dauran bilkul clear nahi hua. Jab tak yeh rate faisla nahi hota, yeh payment final nahi maani jaegi aur KE ke mutabiq usay bade credit bhi milne chahiye.
The K-Electric PLL payment plan, if accepted on KE’s terms, would stretch the disputed May–June 2026 differential across nine months while court protection against immediate SBLC drawdown remains part of the backdrop. Whether PLL accepts the conditions—and when the agreed pricing formula is actually applied—will decide how the K-Electric PLL payment and related credits are finally settled.
