Govt to buy 8 LNG cargoes in July

Bangladesh has decided to import eight liquefied natural gas (LNG) cargoes in July, mirroring the quantity imported in June, from global suppliers to meet the energy demand in industries and power plants, according to sources.
State-run Petrobangla is set to import two LNG cargoes from the spot market in July, while six LNG cargoes will be sourced from long-term suppliers, a senior Petrobangla official told the FE Tuesday.
In June, Petrobangla imported four LNG cargoes from the spot market and four more from long-term suppliers, the official added.
Of the six long-term LNG cargoes for July, Petrobangla will import four from Qatargas and two from OQ Trading, formerly known as Oman Trading International.
Petrobangla has already completed two contracts with Gunvor Singapore Pte Ltd and US-based Excelerate Energy LP to supply separate LNG cargoes from the spot market. The deliveries are scheduled for July 12-13 and July 23-24, and the cargoes will be supplied to the floating storage and regasification unit (FSRU) at Moheshkhali Island in the Bay of Bengal.
Gunvor Singapore Pte Ltd will supply LNG at US$12.98 per million British Thermal units (MMBtu), while Excelerate Energy LP will supply at $13.39 per MMBtu.
From Qatargas, Petrobangla will import four LNG cargoes, priced at around 12.65 per cent of the three-month average price of Brent crude oil, plus a constant of US$0.50 per MMBtu.
Besides, two LNG cargoes will be imported from OQ Trading, priced at around 11.90 per cent of the three-month average price of Brent crude oil, plus a constant of US$0.40 per MMBtu.
In June, Bangladesh imported four LNG cargoes from long-term suppliers, with three sourced from Qatargas and one from OQ Trading.
From February to June, the country has already imported 12 spot LNG cargoes. In the July-December period, Bangladesh aims to import nine more cargoes, bringing the total spot market imports for 2023 to 21 cargoes.
After a seven-month pause, the government has resumed importing LNG from the spot market since February this year. This decision came after natural gas prices were increased by around 178.88 per cent for industries, power plants and commercial entities.
State-run Rupantarita Prakritik Gas Company Ltd (RPGCL), a wholly owned subsidiary of Petrobangla, usually invites offers from 21 listed global LNG suppliers to purchase LNG from the spot market.
Despite payment delays amounting to over US$200 million to different LNG suppliers, both long-term and spot LNG supplies continue, according to an official.
Since May, Bangladesh has been issuing tenders to buy multiple LNG cargoes from the spot market through a single tendering process. This change aims to secure better prices compared to the previous practice of purchasing one spot LNG cargo per tender.
"We shall continue the process of buying more spot LNG cargoes through a single tender until we feel that the LNG price trend in the international market is suitable for it," Petrobangla Chairman Zanendra Nath Sarker told the FE.
As of July 3, 2023, the country's natural gas supply stands at around 2.47 billion cubic feet per day (Bcf/d), including around 711 million cubic feet per day (mmcfd) of re-gasified LNG, according to Petrobangla data.
LNG is re-gasified at two FSRUs with a capacity of 3.75 million tonnes per year (MTPA) at Moheshkhali Island in the Bay of Bengal.
azizjst@yahoo.com