Plan to import LNG from spot mkts, under term deal

Dhaka,  Thu,  24 August 2017
Published : 16 Jun 2017, 00:31:19 | Updated : 16 Jun 2017, 09:55:23

Plan to import LNG from spot mkts, under term deal

Competitive buying price is the target
M Azizur Rahman

Bangladesh will import liquefied natural gas (LNG) from international market under term deal and from spot markets to have a competitive buying price, said officials.

"Like refined petroleum oil, there will be both tender and term deals to source LNG from global suppliers," State Minister for the Ministry of Power, Energy and Mineral Resources (MPEMR) Nasrul Hamid said.

To ink term deals, state-run Petrobangla has already inked two separate memorandums of understanding (MoUs) with Qatar's RasGas and Switzerland-based AOT Energy, said a senior Petrobangla official.

Negotiations with the RasGas and AOT Energy are now continuing, he said.

Bangladesh is eyeing to start import of LNG from international market from early 2018 as the country's first LNG import terminal, a 3.75 million tonne per year capacity floating storage and regasification unit (FSRU) being developed by US-based Excelerate Energy, is expected to be commissioned in April 2018.

The country's second FSRU, also with a similar capacity of 3.75 million tonne per year, is being developed by Summit Group with its commissioning expected by the end of 2018.

Petrobangla is also planning to set up two onshore LNG terminals, each with a capacity of 7.5 million tonne per year within next several years.

Petrobangla signed a MoU with India's Petronet in December to build one of them on Kutubdia Island, and issued an international tender in April seeking bids for construction of the second one.

Petrobangla has already moved to arrange fund to meet the cost of importing LNG from international market.

It sought in February US$1.4 billion from the government coffer to foot import bills of LNG in 2018. The amount is around 77.77 per cent of the estimated total cost, said officials.

Petrobangla sought the fund from the government as subsidy as it would not be able to realise the LNG import cost through its sales to consumers in domestic market.

Natural gas price in domestic market is $2.5-$3.0 per Mcf (1,000 cubic feet), which is much lower than the international price level of LNG.

Petrobangla has estimated that it would have to bear the cost of about $1.8 billion per year from 2018 and onwards.

It has planned to import expensive LNG to the tune of around 500 million cubic feet per day (mccfd) to meet mounting natural gas demand in local market.

It has estimated that it would be able to realise about $400 million per year through sales of re-gasified LNG to domestic consumers.

Earlier, Bangladesh re-initiated tender system to source refined petroleum products in February 2016, after 15 years to get competitive pricing from the suppliers, said a senior official of Bangladesh Petroleum Corporation.

Since then, the BPC has continued sourcing 0.05 per cent sulfur gasoil (diesel), A-1 jet fuel and 180 CST high sulfur fuel oil through both term deals and tendering.

Bangladesh has already decided to source 50 per cent of its total refined petroleum product from international market through open tendering and the remaining half through government-to-government negotiation with state-owned international oil suppliers in 2017, said the BPC official.

Bangladesh has moved to import LNG as it is now reeling under acute natural gas shortage with daily average output of around 2,700 mmcfd against demand of 3,300 mmcfd, according to Petrobangla.

The country started facing natural gas shortage from 2009 with rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, CNG (compressed natural gas) filling stations and households.
Editor : A.H.M Moazzem Hossain
Published by the Editor for International Publications Limited from Tropicana Tower (4th floor), 45, Topkhana Road, GPO Box : 2526 Dhaka- 1000 and printed by him from City Publishing House Ltd., 1 RK Mission Road, Dhaka-1000.
Telephone : PABX : 9553550 (Hunting), 9513814, 7172017 and 7172012 Fax : 880-2-9567049
Email :,
Copyright © 2017. All rights reserved
Powered by : orangebdlogo