Swiss-based trader and charterer Gunvor and Pakistan LNG have settled a legal action over cancelled gas shipments in 2022.
The agreement terms are confidential, but Gunvor said they were satisfactory for both companies.
“The parties look forward to continuing to work together,” the trader added in a statement.
Bloomberg reported that Gunvor had cancelled a contract to supply Pakistan with five LNG cargoes in 2022.
The shipments were sent instead to countries including the UK and Italy.
There was no suggestion of anything illegal in the action and Gunvor operated within the terms of its contract.
The report said the value of the cargoes would have been about $200m if delivered to Pakistan.
The group instead sold the gas for more than $600m.
Pakistan had to turn to the spot market, paying double what it had agreed with Gunvor.
S&P Global reported Pakistan received refusal notices, with the trader stating it would be unable to ship the LNG.
Pakistan LNG had a five-year contract with Gunvor that ended in July 2022.
Energy security concerns
The country had also been facing supply issues under a term deal with Italy’s Eni.
The cancellations raised concerns about energy security.
S&P Global reported the government intended to impose a penalty of 30% of the price of the term cargo, as well as challenge the force majeure declaration.
Earlier this month, Gunvor pleaded guilty to corruption and agreed to pay $661m to settle an investigation into the bribery of officials at Ecuador’s state-owned oil company.
The company was behind a complex bribery scheme for nearly a decade in return for securing deals that ultimately benefited Gunvor, said the US Justice Department.
Gunvor admitted conspiring to violate US bribery laws in a plea deal with the government.
The group agreed to pay a fine of $375m and forfeit the $287m it made from the bribery schemes.
Gunvor is alleged to have paid more than $97m to intermediaries between 2012 and 2020, knowing that some of the money would be used to bribe company officials.
The payments were routed through banks in the US using shell companies in Panama and the British Virgin Islands, TradeWinds reported.
