Excelerate Energy to start LNG supply from early January

US-based Excelerate Energy is set to begin supplying liquefied natural gas (LNG) to Bangladesh from early January under a long-term contract, providing a fresh boost to the country's strained natural gas-supply system.
"We will start purchasing LNG from the US company from January under a sales and purchase agreement (SPA) signed a couple of years ago," a senior Petrobangla official told The Financial Express on Monday.
Under the SPA, signed in November 2023, Excelerate Energy will supply up to 1.0 million tonnes per year (MTPA) of LNG to state-run Petrobangla, the official said.
Bangladesh will import LNG from Excelerate Energy for 15 years from 2026 onward, with deliveries structured in phases. The US firm will supply 0.85 MTPA from January 2026 to December 2027, followed by 1.0 MTPA annually from January 2028 to December 2040.
This translates into 12 LNG cargoes each in 2026 and 2027, and 16 cargoes per year from 2028 through 2040, according to Petrobangla.
Petrobangla will purchase LNG from Excelerate Energy at around 13.35 per cent of the three-month average Brent crude oil price, plus a constant premium of US$0.30 per million British thermal unit (MMBtu).
With Brent crude currently hovering around US$60 per barrel, the LNG price under the contract would be approximately US$8.50 per MMBtu, officials said.
Excelerate Energy has previously supplied several LNG cargoes to Petrobangla from the spot market.
Bangladesh began importing LNG in August 2018 after signing its first-ever long-term SPA with Qatar's RasGas, later renamed Qatargas and subsequently QatarEnergy, on September 25, 2017, to import up to 2.5 MTPA of LNG over 15 years.
Apart from the LNG supply agreement, Petrobangla had also signed two other agreements with Excelerate Energy in recent years - one to expand the Moheshkhali Floating LNG (MLNG) terminal and another term-sheet agreement to build a floating storage and regasification unit (FSRU) near Payra seaport.
Excelerate expanded the MLNG terminal's send-out capacity by 20 per cent to 600 million cubic feet per day (mmcfd) from 500 mmcfd in January 2024, seven months ahead of schedule, officials said.
The long-term LNG SPA was linked to the expansion of Excelerate's FSRU capacity, a Petrobangla official noted, adding that the US firm did not charge an additional fee for the capacity increase as Petrobangla agreed to purchase LNG under a long-term arrangement.
Sources said Excelerate Energy currently owns both operational FSRUs in Bangladesh, with a combined regasification capacity of around 1,000 mmcfd.
In addition to owning the MLNG terminal, the US firm also provides an FSRU to Summit Group's Summit LNG Terminal Company Ltd under a 15-year charter agreement.

Azizjst@yahoo.com