The energy ministry is now working on a mechanism to initiate importing liquefied natural gas (LNG) from international spot market to rip the benefit of 'price crash.'
Several committees are now involved in the initiative to start spot LNG import from second half (H2) of this year, the state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) managing director Md Kamruzzaman told the FE.
JKM, the benchmark for spot LNG prices for North Asia, plunged to a historic low of US$1.925 per million British thermal unit (MMBtu) last week, as the ongoing global shutdown to combat the coronavirus pandemic has reduced world demand of LNG, sources said.
The RPGCL, a subsidiary of the state-run Petrobangla, completed inking deals with the suppliers over the past one month, after selecting them through a competitive bidding, to source around one-fourth of the country's total required LNG from spot market.
The RPGCL has already signed master sale and purchase agreement (MSPA) with 14 global suppliers separately to import lower-priced LNG from spot market, they said.
Bangladesh has been importing lean LNG under long-term deals from Qatar's RasGas, which is now merged with Qatargas and renamed as Qatargas, and Oman's Oman Trading International (OTI). The country started regular import of LNG in August 2018.
Besides, the spot LNG providers will supply the fuel from the spot market to the country's receiving terminals following instructions from time to time, based on demand.
The RPGCL will initially make proposal to the selected firms, specifying the quantity of spot LNG for supplying to the LNG terminals.
The imported spot LNG should have a gross heating value of 1,025-1,100 Btu per standard cubic feet. It should be supplied on a delivered ex-ship basis, and the vessel size should range between 125,000 cubic metre and 220,000 cubic metre.
The RPGCL will procure spot LNG, based on market prices, terminal availability, increased re-gasification capacity, and downstream demand.
Currently, two Floating Storage Regasification Units (FSRUs), owned by the US-based Excelerate Energy and local Summit Group, are re-gasifying around 600 million cubic feet per day (mmcfd) of LNG, as of April 28. Each of the FSRUs has the capacity to re-gasify around 500 mmcfd.
Bangladesh's overall natural gas output is hovering around 2,400 mmcfd, of which 602 mmcfd is regasified LNG, and the remaining comes from local production, according to the Petrobangla statistics as on April 28.
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