Fifth bid underway to buy spot LNG in Jan

Bangladesh is preparing to float the fifth tender to purchase liquefied natural gas (LNG) from international spot market in January.
Rupantarita Prakritik Gas Company Ltd (RPGCL) previously floated four tenders and the latest two bids are to take delivery of two LNG cargoes each having 138,000-cubic metre capacity in December.
The tender for the November delivery of spot LNG has already been cancelled due to a higher-than-expected price, a senior energy ministry official told the FE.
Despite having a higher price quote for early December delivery, the state-run RPGCL is yet to cancel it.
The price, offered by the lone bidder Vitol Asia Pte for delivery, is higher than November's best bid and also the two long-term contractors Qatargas and Oman Trading International (OTI).
The company is currently receiving bids for the late December delivery of spot LNG cargo, said the official.
"We'll continue our drive to import LNG from spot market to diversify our LNG import sources," he cited.
The government's energy and mineral resources division initiated to import LNG from spot market two years after the country's first LNG import in August 2018.
It could purchase so far only one LNG cargo from spot market at an 'expected' price, said a senior energy ministry official.
Global energy prices, including that of spot LNG, soared recently for a booming demand in developed nations like the US and Europe over the ensuing winter.
Market insiders, however, said spot LNG prices might come down again as global coronavirus` infections are on the rise again.
The RPGCL, that oversees LNG imports, invites all the 14 selected global LNG suppliers during the tender to quote prices for delivery of each cargo.
Bangladesh has initiated importing LNG from the spot market in late September in an effort to take advantage of low prices and meet the country's growing demand.
Vitol delivered the first and the lone spot LNG cargo carrying an estimated 138,000-cubic metres of LNG from spot market on September 25. Regasified spot LNG entered the national gas grid immediately after unload.
Bangladesh could save some Tk 300 million ($3.52 million) through purchasing LNG from spot market from the first cargo compared to regular LNG market.
Vitol offered the best bid at $3.8321 per million British thermal unit (MMBTu) to bag the deal to supply its first LNG cargo in Bangladesh.
Fourteen suppliers invited to fifth tender include Mitsui & Co Ltd, Marubeni Corporation, Osaka Gas Co Ltd and Jera Co Inc of Japan, Cheniere Marketing International LLP, Vitol Asia Pte Ltd, Trafigura Pte Ltd and Diamond Gas International Pte Ltd of Singapore.
Excelerate Energy Ltd Partnership of USA, Woodside Petroleum Ltd of Australia, Eni S.P.A of Italy, AOT Trading AG of Switzerland, Petronas LNG Ltd of Malaysia, and joint venture of Summit Corporation Ltd and Summit Oil & Shipping Co Ltd of Bangladesh are also the bidders.
Bangladesh buys LNG under a 15-year term deal with Qatargas to import around 2.5-million tonnes of LNG every year.
The price is 12.65 per cent of the three-month average price of Brent crude oil plus $0.5 constant per MMBTu.
It has also a 10-year deal to import LNG from OTI at 11.9 per cent of the three-month average price of Brent crude oil plus $0.40 constant per MMBTu.
Bangladesh has two operational FSRUs (floating, storage, and regasification unit) to regasify imported LNG.
Each unit has the capacity to regasify an estimated 500 mmcfd equivalent of LNG.

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