Bangladesh has moved to import one fourth of its total LNG (liquefied natural gas) requirement from spot market to reap the benefits of a downtrend in global LNG prices.
"We're working to ensure LNG imports from spot market within months," a senior official of energy and mineral resources division told the FE on Wednesday.
Spot market is a public financial market in which financial instruments or commodities are traded for immediate delivery.
Such market for LNG was developed over the past several years with a glut of LNG output alongside the growth of emerging markets for the natural gas.
State-run Petrobangla is importing LNG only under term deals with suppliers.
Its first LNG shipment reached Moheshkhali Island in the Bay of Bengal on April 24, 2018.
Energy experts were also urging the government for from spot-market imports with intent to trim down the ever-escalating import costs.
Officials said imported LNG is regasified at an FSRU (floating, storage, regasification unit) before it is added to the national grid.
Petrobangla imported under term deals within the range from around $8.5 per MMBtu (metric million British thermal unit) to $10 per MMBtu during the period.
But market insiders said Asian spot prices for LNG have dropped drastically for a global supply glut.
The Platts JKM, which represents the prices of spot cargoes delivered to northeast Asia, averaged around $4.93 per MMBtu in the second quarter of 2019.
It is down from $8.26 per MMBtu a year ago, they added.
Two FSRUs, owned by US-based Excelerate Energy and local Summit Group, together regasified around 573 million cubic feet per day (mmcfd) as of July 16.
A senior Petrobangla official said both have the capacity to regasify around 1,000 mmcfd in total.
"We'll ink a general master sales agreement (MSA) with over a dozen global suppliers for spot-market LNG import," said Rupantarita Prakritik Gas Company Ltd (RPGCL) managing director Md Quamruzzaman.
To this end, RPGCL earlier shortlisted bidders from the US, the UK, France, Qatar, Australia, Italy, Spain, Switzerland, Japan, Singapore, Hong Kong, Malaysia and their consortia.
The selected firms would provide LNG to local LNG receiving terminals from spot market after getting orders from state-run Petrobangla time to time, based on demand, said the official.
RPGCL, the wholly-owned subsidiary of Petrobangla, would initially propose the selected firms specifying the quantity of LNG for supplying to terminals.
It will seek to purchase LNG under MSA to be inked with each firm, disclosed Mr Zaman.
The imported spot LNG should have a gross heating value ranging 1,025-1,100 Btu per standard cubic feet (scf).
It will require blending with the locally produced gas, which is sulfur-free and sweet gas, before it is delivered to end-users.
The imported LNG's sulfur content could thus be low.
The chosen firms will supply LNG on a delivered ex-ship basis and the vessel size should range between 125,000 cubic metres (cu. m) and 220,000 cu. m.
RPGCL will procure spot LNG based on market prices, terminal availability, increased regasification capacity and downstream demand.