FE Today Logo

Omani firm starts supplying LNG

M Azizur Rahman | January 30, 2019 00:00:00

Oman Trading International (OTI), an Omani firm, started supplying liquefied natural gas (LNG) to Bangladesh from Monday, which will help meet the growing demand for gas in the country.

A vessel carrying around 136,000 cubic metres of lean LNG reached Bangladesh's maiden operational floating LNG terminal at Moheshkhali island in the Bay of Bengal on Monday evening, a senior Petrobangla official told the FE.

The Omani firm is the second supplier of LNG in Bangladesh after Qatar's RasGas that has been supplying LNG since April 2018.

The Omani LNG cargo is, however, three months ahead of its scheduled start of supplying regular LNG to Bangladesh.

The OTI has supplied the LNG following a request from the state-run Petrobangla, said the official.

Petrobangla could also start utilising the full capacity of the floating LNG terminal of the US-based Excelerate Energy by re-gasifying around 500,000 Mcf/d equivalent of LNG for consumers since January 25, 2019 riding on the arrival of OTI's LNG cargo, said the official.

The commercial operation of the Excelerate's floating, storage and re-gasification unit (FSRU) -- Excellence -- began on August 18, 2018 after importing the first LNG with the FSRU on April 24, 2018.

But the delay in the construction of a 30-kilometre, 42-inch diameter Anwara-Fouzdarhat gas transmission pipeline kept the FSRU unuitilised for long.

The state-run Gas Transmission Company Ltd (GTCL) could, however, complete the construction of the pipeline and commission it on November 27, 2018, readying to carry additional re-gasified LNG.

After commissioning of the pipeline, the Petrobangla failed to initiate full utilisation of the FSRU due to LNG scarcity, as it had requested Qatar's RasGas to increase the supply but was declined, the official added.

With the OTI's LNG supply, the country's FSRU is currently re-gasifying the maximum agreed capacity of LNG.

Petrobangla has imported LNG through 15 regular cargoes and one commissioning cargo as of January 29, 2019.

Under the sales and purchase agreement (SPA) for 1.0 million tonnes per year (Mtpa) of LNG over 10 years, signed in May 2018, Bangladesh was scheduled to get first lean LNG supply from OTI from May 2019.

The SPA was priced at around 11.9 per cent of the three-month average of Brent crude oil prices plus 40 cents per MMBtu (million British thermal unit), and states that payments are to be made within 25 days of delivery.

The deal comes with a degree of volume flexibility.

Petrobangla has the option of increasing LNG imports to 1.5 Mtpa or lowering it to 0.9 Mtpa without having to pay penalties.

The country's FSRU, owned by Summit Group, is expected to come online by April 2019.

Apart from Qatar's RasGas and Oman's OTI, the Petrobangla has also a letter of intent (LOI) agreement with Indonesia's Petramina to import around 1.0 Mtpa annually for 10 years.

Bangladesh has also shortlisted more than two dozen LNG suppliers to purchase LNG on a spot basis.

[email protected]

Share if you like