Govt initials deal with AOT Energy to import lean LNG

The government has initialled an agreement with Switzerland-based private firm AOT Energy AG to import annually around 1.25 million tonnes of lean LNG (liquefied natural gas) for 15 years.
State-run Petrobangla initialled the deal seven months after inking a memorandum of understanding (MoU) with the company on June 13 last year.
A senior official of Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR) said Petrobangla inked the deal with AOT Energy AG under the Speedy Supply of Power and Energy (Special Provision) Act 2010 bypassing tender.
The law has a provision of immunity to those involved with quick-fix remedies.
Earlier on Sunday, Petrobangla inked a letter of intent (LOI) agreement with Indonesia's Petramina to import annually around 1.0 million tonnes of LNG for 10 years.
The LOI between Petrobangla and Petramina was signed after a meeting between Bangladesh Prime Minister Sheikh Hasina and Indonesian President Joko Widodo, who was on an official visit to Bangladesh then.
The final sales and purchase agreement (SPA) with AOT Energy would be inked after the law ministry's vetting and nod from the cabinet committee on public purchase, said a senior Petrobangla official.
With these deals, the quantity of Bangladesh's total LNG import in pipeline reached 4.50 million tonnes per year including the SPA with Qatar's RasGas to import 2.5 million tonnes of lean LNG per year.
LNG prices have been set in line with three-month average Brent crude prices, said managing director of state-owned Rupantarita Prakritik Gas Company Ltd (RPGCL) Md Quamruzzaman without elaborating.
The LNG price would, however, be lower than that of RasGas's, he indicated.
RPGCL, a wholly-owned subsidiary company under Petrobangla, is in charge of the country's LNG purchases.
Petrobangla on September 25 last year inked the South Asian country's first-ever SPA with RasGas to annually buy 2.5 million tonnes of lean LNG over 15 years.
During the initial five years of the deal, RasGas will supply annually around 1.8 million tonnes of LNG, which will increase up to 2.5 million tonnes in next 10 years, said a senior Petrobangla official quoting the terms of the SPA.
The purchase price has been set at around 12.65 per cent of the three-month average price Brent crude oil plus US$ 0.50 constant per MMBTu (per 1 million British thermal units), he said.
If Petrobangla has more demand during the first five years, it can increase the volume of LNG import to 2.5 million tonnes per year and during the next 10 years Petrobangla has an option to reduce the amount by 10 per cent every year, according the terms of the SPA. If Bangladesh takes less than the base amount of LNG in any year, it will have to pay the price on a take-or-pay basis.
The South Asian country is expecting its first LNG cargo in April 2018.
Bangladesh will be receiving LNG in floating terminals and its first LNG import terminal, a 3.75 million tonnes per year FSRU (floating, storage, re-gasification unit) being developed by US-based Excelerate Energy, is expected to be commissioned in April and its second terminal, also having a capacity of 3.75 million tonnes per year, being developed by Summit Group, is expected to be commissioned by October.
The country is in negotiations with four other suppliers for long-term deals and is also eyeing short-term and spot purchases.
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