BD set to sign 3rd LNG contract with Qatar today
FE REPORT | Thursday, 1 June 2023
Bangladesh is all set to sign its third contract today (Thursday) to import liquefied natural gas (LNG) from suppliers under long-term contracts.
A high-powered delegation led by State Minister for the Ministry of Power, Energy and Mineral Resources Nasrul Hamid left the country to finalise the deal in Qatar.
Energy Secretary Dr Md Khairuzzaman Majumder, Petrobangla Chairman Zanendra Nath Sarker and some other top government officials are also among the visiting representatives in Qatar.
State-run Petrobangla is expected to sign a sales and purchase agreement (SPA) with QatarEnergy to import around 2.0 million tonnes of LNG annually for 15 years.
According to sources, Bangladesh is expected to begin importing LNG from QatarEnergy starting in January 2026. However, the sources could not provide details on the prices.
This will be Bangladesh’s second long-term deal with Qatari LNG suppliers.
Currently, Petrobangla has two SPAs – one with Qatargas and another with OQ, previously known as Oman Trading International.
Bangladesh has a 15-year SPA with Qatargas to import 1.80-2.50 million tonnes of LNG every year.
Petrobangla is required to pay 12.65 per cent of the three-month average price of Brent crude oil plus a constant of 50 cents per million British thermal unit (MMBtu).
The country has a 10-year SPA with OQ to import around 1.50 million tonnes of LNG annually at 11.9 per cent of the three-month average price of Brent crude oil, plus a constant price of 40 cents per MMBtu.
Qatar is the world’s leading LNG exporter and competition for LNG has intensified since the start of the Ukraine war. Particularly, Europe requires vast amounts of LNG to replace Russian pipeline gas, which used to account for almost 40 per cent of the continent’s imports.
The contract will be QatarEnergy’s second to Asia since it started selling the gas expected to be produced from the North Field expansion project.
Bangladesh’s Prime Minister Sheikh Hasina visited Qatar last week and discussed LNG supply with Qatari Amir Sheikh Tamim Bin Hamad Al Thani, according to sources.
The premier also had discussions with Qatar’s Minister of State for Energy Affairs Saad Sherida al-Kaabi in Doha regarding LNG imports from Qatar.