Amid a US dollar crunch and subsequent payment delays, Bangladesh has decided to import a total of nine LNG cargoes from the spot market during this July-December period to meet the country’s mounting natural gas demand, especially in industries and power plants.
However, despite the planned import, gas crisis will continue to hurt the economy because of the demand-supply mismatch.
The country has been importing a total of 12 spot LNG cargoes from February to June 2023, with overdue payments worth around US$ 100 million to spot LNG suppliers, a senior Petrobangla official told the FE on Monday.
State-run Rupantarita Prakritik Gas Company Ltd (RPGCL), a wholly-owned subsidiary of Petrobangla, has already floated a tender to purchase two spot LNG cargoes for July deliveries, the official said.
Petrobangla will take delivery of the first spot LNG cargo on July 10-11 and the second on July 23-24, said the official.
Despite payment delays, both long-term and spot LNG suppliers are continuing LNG deliveries to Bangladesh, said the official.
Bangladesh last awarded contracts to three separate companies for supplying four LNG cargoes in the latest spot tender for June deliveries to the Moheshkhali floating storage and regasification units (FSRUs), a senior RPGCL official said.
Of the three firms, Vitol Asia Pte Ltd won contracts to supply two LNG cargoes for June 1-2 and June 14-15 deliveries at US$ 10.9788 per million British Thermal Unit (MMBtu) and US$ 11.8888 per MMBtu, respectively.
Gunvor Singapore Pte Ltd will supply one LNG cargo for June 8-9 delivery at the maximum price of US$ 12.47 per MMBtu and the remaining cargo will be supplied by Excelerate Energy LP at US$ 12.19 per MMBtu for June 23-24 delivery, the official said.
Each of the spot LNG cargoes will carry around 3.36 million MMBtu of lean LNG for regasification at the Moheshkhali FSRUs.
Since May 2023, Bangladesh has been floating tenders to buy more than one LNG cargo from the spot market through a single tendering process, he said.
The country purchased two LNG cargoes at a time through a single tendering process in May and four cargoes through a single tendering process in June, obtaining the lowest prices in recent times, according to Petrobangla Chairman Zanendra Nath Sarker.
French energy company TotalEnergies was awarded a contract to supply two LNG cargoes for deliveries to the Moheshkhali FSRUs on May 16-17 and May 25-26, at prices of US$ 13.33 and US$ 13.28 per MMBtu, respectively.
Previously, Bangladesh would only buy one spot LNG cargo in each tender, Sarker said. “We shall continue the process of buying more spot LNG cargoes through a single tender until we deem the LNG price trend in the international market to be suitable.”
He said Bangladesh could save around Tk 1.0 billion (US$ 9.34 million) by purchasing two spot LNG cargoes at a time in May alone. However, the Petrobangla chairman did not specify the amount of money saved in June.
Apart from the spot market, Bangladesh will import a total of six LNG cargoes in July from long-term suppliers, with four from Qatargas and two from OQ (previously known as Oman Trading International).
Officials said Petrobangla is facing difficulties in paying its dues to LNG suppliers and international oil and gas companies. Multiple officials at the state firm and the energy ministry have confirmed that Bangladesh has delayed payments for both long-term and spot LNG cargoes that were recently imported.
A senior Petrobangla official, who declined to be named, said that payments to long-term LNG suppliers Qatargas and OQ Trading, formerly known as Oman Trading International, have been delayed. Payments to spot LNG suppliers Vitol Asia Pte Ltd and France’s TotalEnergies have been delayed too.
“Petrobangla is trying its best to clear the dues to LNG suppliers and the IOCs,” said Petrobangla Chairman Sarker, adding that the company should not be held solely responsible for the outstanding payments.
“We wrote to the central bank and the energy ministry to facilitate payments,” he added.
Petrobangla typically purchases LNG and natural gas in US dollars but sells it in the local currency to end users through its subsidiary natural gas marketing and distribution companies.
azizjst@yahoo.com
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