BD again urges Qatar to cut LNG price

Bangladesh has requested Qatar again to reconsider a downward adjustment of liquefied natural gas (LNG) import price from Qatargas against the backdrop of global coronavirus pandemic.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid made the request during an online meeting with Qatar's State Minister for Energy Affairs Saad Sherida Al-Kaabi on Monday.
Mr Hamid had placed a similar request to Mr Kaabi in last October, when he had reportedly assured of reconsidering the LNG price during extension of the existing memorandum of understanding (MOU) between the two countries.
Last year's appeal was made in a meeting when an eight-member Qatari delegation, headed by Mr Kaabi, came to Bangladesh Secretariat.
But Bangladesh is yet to get any positive response till date from the middle-eastern LNG giant.
It is also not clear whether Qatar will respond positively this time to Bangladesh's call for lowering the LNG price, considering the global coronavirus outbreak and subsequent fall of oil and gas prices.
Currently, the state-run Petrobangla has been importing lean LNG from Qatargas at around US$ 6.0 per mmBtu (million British thermal unit).
But it imported lean LNG from spot market at $ 3.83 per mmBtu a couple of weeks back.
During the online meeting on Monday, the Qatari minister was reportedly keen for more bilateral businesses in different areas, including that of LNG.
A joint venture of Qatar Petroleum LNG Services and the US-based ExxonMobil is among 11 other global bidders that are interested to build a land-based LNG import terminal at Matarbari in Cox's Bazar.
The energy ministry has not yet short listed the bidders for building the terminal with 1,000 million cubic feet per day (mmcfd) capacity.
Qatar is also interested to invest in the country's LNG-based power sector, said sources.
Currently, Petrobangla has been importing LNG under a deal to purchase around 2.5 million tonnes per year (Mtpa) of lean LNG for over 15 years from Qatar's RasGas, which merged with Qatargas in 2018.
During the initial five years of the deal, Qatargas will annually supply around 1.8 million tonnes of LNG, which will increase up to 2.5 Mtpa in the next 10 years.
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. During the next 10 years, Petrobangla has the option to reduce the volume 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 a take-or-pay basis, as per the deal.
Several countries around the globe, including India and Pakistan, lowered down their LNG import costs from Qatar in 2015 following renegotiations.

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