Global liquefied natural gas suppliers are lobbying with Bangladesh to ink deals to secure a persistently 'higher' price of the fuel for a long time.
The LNG suppliers, who have already signed initial deals and memorandums of understanding with state-run Petrobangla, are at the forefront.
Indonesia's Petramina, Malaysia's Petronas, Brunei's Brunei LNG, and Switzerland's AOT Energy AG are among the global LNG suppliers that have already inked MoUs or letters of intent with Petrobangla and awaiting final sales and purchase agreements.
Some of the firms have already written letters to the ministry of power, energy and mineral resources while others are visiting top Petrobangla and energy ministry officials to secure the final LNG supply deals, indicated a senior energy ministry official.
They are in a hurry predicting a persistent downtrend in global LNG prices in the near future with the revolution of alternative fuels in the global energy basket, he said.
But the energy ministry has adopted a go-slow policy in striking deals for securing long-term supplies of LNG, he added.
People familiar with the situation said LNG cargoes were trading below US$4.0 per million British thermal unit, or mmBtu, over the past several months due to the supply glut.
Indian Oil Corp bought a cargo for delivery in the second half of August from commodity trader Trafigura at $3.69 per mmBtu while China National Offshore Oil Corp purchased a cargo for delivery in early September from Vitol at $3.90 per mmBtu, they said.
On the contrary, Petrobangla has been importing LNG under long-term deals at prices ranging from $8.5 per mmBtu to $10 per mmBtu over the past one and a half years.
Two global suppliers - Qatar's RasGas and Oman's Oman Trading International - are currently supplying LNG to Bangladesh.
Petrobangla started regular imports of LNG from September 9, 2018.
Petrobangla signed the country's first ever sales and purchase agreement with RasGas to buy around 2.5 million tonne per year, or Mtpa, of lean LNG over 15 years on September 25 last year.
During the initial five years of the deal, RasGas will annually supply around 1.8 million tonnes of LNG, which will increase up to 2.5 Mtpa in the next 10 years, said a senior Petrobangla official.
The purchase price has been set at around 12.65 per cent of the three-month average price of Brent crude oil plus $0.50 constant per mmBtu.
If Petrobangla has more demand during the first five years, it can increase the LNG import volume annually to 2.5 Mtpa; and during the next 10 years, Petrobangla has the option to reduce the amount by 10 per cent every year.
If Bangladesh takes less than the base amount of LNG in any year, it will have to pay the price on take-or-pay basis.
It has similar agreement with Oman's firm to import annually around 1.0 Mtpa of LNG for 15 years.
Petrobangla has been purchasing LNG at around 11.9 per cent of the three-month average of Brent crude oil prices plus $0.40 cents per mmBtu and the payment is to be made within 25 days of delivery.
Petrobangla has the option of increasing LNG imports to 1.5 Mtpa or lowering it to 0.9 Mtpa without having to pay the penalties.
Petrobangla currently has a preliminary agreement with AOT Energy AG to import around 1.25 Mtpa of lean LNG for 15 years.
It also signed a letter of intent with Indonesia's Pertamina to import around 1.0 Mtpa of LNG for 10 years.
Officials said, to avoid 'higher' costs, the energy ministry had earlier shelved plans to build three small-scale floating LNG terminals by LNG suppliers and purchase re-gasified LNG from them.
Commodity traders Trafigura, Gunvor and Vitol, as well as Belgium-based shipping company Exmar NV were in final talks with Petrobangla to build the mini floating storage units and sell gas to Petrobangla.
It also scrapped talks with Indian Reliance Power Ltd to build a new 3.75 Mtpa floating LNG import terminal for LNG imports on the Kutubdia Island, near the port city of Chattogram.
Azizjst@yahoo.com