Bangladesh to purchase 8 LNG cargoes from spot market

Bangladesh will import eight LNG cargoes from international spot market until June 2023, State Minister for Power, Energy and Mineral Resources Nasrul Hamid told a local media on Saturday.

State-run Petrobangla will have to count around Tk 68 billion to import these LNG cargoes from spot market considering the current market price.

First of the LNG cargoes from international market is all set to be delivered during February 21-22 to Matarbari floating, storage and re-gasification unit (FSRU) by French firm TotalEnergies.

TotalEnergies will supply around 3.36 million MMBTu of LNG at $19.78 per million British Thermal Unit (MMBTu) at the cost of Tk8.50 billion.

Separately, the South Asian economy will be importing a total of three LNG cargoes in February from its two existing long term LNG suppliers - two cargoes from Qatargas and one cargo from Oman Trading International, or OTI, currently known as OQ.

Bangladesh had imported its previous LNG cargo from spot market seven months ago during June 22-23, 2022 delivery to its Moheshkhali FSRU at S$24.75 per MMBTU. Gunvor Singapore Pte Ltd had supplied the LNG cargo having the quantity of 138,000 cubic metres.

Bangladesh will start importing increased quantity of LNG regularly from spot market from March, Petrobangla Chairman Zanendra Nath Sarker told S&P Global Commodity Insights earlier.

Bangladesh has a target to ramp up the country's overall natural-gas output at least by over 13.20% to more than 3,000 MMcf/d as industries seek uninterrupted gas supply to keep the wheel rolling on a full scale in the process of a rebound, he said.

Bangladesh's overall natural gas supply now hovers around 2,612MMcf/d with re-gasified LNG of around 381 million cubic feet per day (mmcfd), according to official data of Petrobangla as on February 10, 2023.

The country will increase the supply of re-gasified LNG to around 700 mmcfd during next summer, he said.

Bangladesh raised the natural gas tariffs by up to 178.88% through an executive order last month, which came into effect from February 1, to secure funds for importing increased quantities of LNG and to meet the growing domestic demands especially in industries and ensure uninterrupted supply of gas to the consumers.

The country aims to meet its growing demand of natural gas in export-oriented industries, power plants and commercial purposes through importing LNG from high-priced spot market, a government notification signed by deputy chief information officer of the Ministry of Power, Energy and Mineral Resources, or MPEMR, noted during the tariff hike.

Bangladesh had ceased importing LNG from the spot market since July 2022 amid its price volatility and fund constraints in the wake of a global crisis.

A twin-shock from the Ukraine war -- energy blockade and dollar dearth for high commodity prices -- forced Bangladesh to cease LNG purchase from the volatile spot market last year, Sarker said.

The government also had initiated austerity measures shutting all shops and shopping malls after 8.0pm every day from July last year after putting the moratorium on import of expensive spot LNG.

Qatargas and OQ Trading will supply a total of 56 LNG cargoes in 2023, the same cargoes as they supplied during 2022, according to Petrobangla.