Govt initiates two deals to buy re-gasified LNG

The government has initiated two separate sales and purchase agreements (SPAs) with Trafigura and the joint venture (JV) of Gunvor and Exmar to purchase 200 mmcfd each of imported re-gasified LNG from mid-2018, said officials.
The firms will supply the fuel at the jetties of the state-owned Chittagong Urea Fertilizer Company Ltd (CUFL) and multinational Karnaphuli Fertilizer Company Ltd (Kafco), state-run Rupantorito Prakritik Gas Company Ltd (RPGCL) managing director Md Quamruzzaman told the FE.
Trafigura will supply re-gasified LNG for 10 years, while the JV of Gunvor and Exmar for five years as per the deals.
Mr Quamruzzaman did not disclose the price of the re-gasified LNG that Bangladesh will pay to these firms, but said the price has been tagged to the international market price of brent crude oil.
Project Processing Committee (PPC), a high-powered committee to approve the energy sector projects, initiated the SPAs with the firms over the last couple of days, he further said.
The final SPAs will be inked after vetting by Ministry of Law and approval from Cabinet Committee on Government Purchase, he added.
RPGCL, a wholly-owned subsidiary of Petrobangla, sent letter of intents (LOIs) in the first week of November to ink SPAs with the companies over LNG purchase. These firms were among the 13 firms that initially had shown interest for the work.
Bangladesh signed the country's first and much-expected final SPA with Qatar's RasGas on September 25 to import 2.5 million tonnes of lean LNG per year for 15 years.
The country is eyeing to ink more SPAs soon, as it is in negotiations with other potential LNG suppliers, with whom it has inked memorandums of understanding (MOUs) to import LNG. Earlier, Gunvor inked a MOU with Petrobangla on September 19 to supply LNG.
Gunvor Singapore Pte Ltd and Trafigura Pte Ltd Singapore have also been short-listed among the 30 firms to supply spot LNG to Bangladesh, as the country is seeking to import spot LNG from suppliers.
Bangladesh is eying to start importing LNG in early 2018, and is making concerted efforts to move forward with the necessary infrastructure.
The country's first LNG import terminal, a 3.75 million tonne per year FSRU, being developed by the US-based Excelerate Energy, is expected to be commissioned in April 2018.
Bangladesh is currently grappling with an acute natural gas shortage, with the output of around 2,700 million cubic feet per day (mmcfd) against the demand for over 3,300 mmcfd, according to Petrobangla.
Bangladesh started facing natural gas crisis from 2009 with rapid industrialization forcing Petrobangla to ration natural gas supply to gas-guzzling industries, power plants, CNG (compressed natural gas) filling stations and households.

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