Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The government received a price quotation from the bidder concerned to purchase liquefied natural gas (LNG) from the spot market for early March delivery after two months of delay.
Singapore-based Vitol Asia Pte Ltd was the lone bidder, and it quoted US$10 per million British thermal unit (mmBtu) to supply 138,000 cubic metres of LNG cargo from spot market for the next month's delivery, a senior official of the Petrobangla told the FE.
An evaluation committee is yet to decide whether the tender will be awarded or not.
The state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) is, however, continuing its effort to purchase LNG from the international spot market at rational and suitable prices.
The government has a plan to import around one-fourth of the country's total LNG requirement from the spot market at its expected price.
In the past tenders, the RPGCL received only one tender in September within its expected price.
Hence, the agency could so far import only one LNG cargo from the spot market, which was delivered in late September.
Vitol Asia Pte delivered the lone cargo from the spot market, carrying around 138,000 cubic metres of LNG, on September 25.
Re-gasified spot LNG entered the national gas grid immediately after the start of unloading.
Bangladesh could save around Tk 300 million ($3.52 million) in purchasing LNG from spot market from the first cargo compared to the regular LNG market.
Vitol Asia offered the best bid at $3.8321 per mmBtu to bag the deal for supplying its first LNG cargo to the country during September 2020.
After September, the RPGCL had invited tenders once for November 2020 delivery and twice for December 2020, January 2021 and February 2021 deliveries, but did not get its expected price.
None of the bidders turned up to the government's call to supply LNG from spot market for January and February 2021 deliveries.
The 14 suppliers, allowed to bid for Bangladesh's spot tenders, are: Mitsui, Marubeni, Osaka Gas, Jera, Cheniere Marketing, Vitol Asia, Trafigura, Diamond Gas, Excelerate Energy, Woodside Petroleum, Eni, AOT Trading, Petronas, and the joint venture of Summit Corp and Summit Oil & Shipping of Bangladesh.
Bangladesh initiated importing LNG from spot market after two years of its first LNG cargo import in August 2018.
Currently, the country's LNG import price under long-term contracts with Qatargas and Oman Trading International, ranges around $7.50-$8.00 per mmBtu, an official said.
Bangladesh has a 15-year contract with Qatargas to import around 2.5 million tonnes of LNG per year, at a 12.65 per cent slope of the three-month average Brent price plus a 50-cent constant. Its contract with OTI is for 10 years at an 11.9 per cent Brent slope plus 40 cents.
The country has two operational floatings, storage regasification units (FSRUs) with a capacity of around 500 million cubic feet per day (mmcfd) equivalent of LNG.
Excelerate Energy started supplying from its FSRU in August 2018, while Summit in April 2019. The Petrobangla was operating the FSRUs at about half of their capacity before pipelines were expanded to increase their capacity.
The country has been one of the fastest-growing LNG import markets since beginning to import LNG in 2018.
Bangladesh is aiming to boost LNG import by more than one third in 2021 from 2020 level, with most of the incremental volume expected to be sourced from the spot market, said the Petrobangla official.
The country eyes importing around 12.14 million cubic metres of LNG in 88 cargoes during January-December 2021, of which 64 from term dealers and 24 from the spot market, after it imported 8.97 million cubic metres in 2020.
The 2020 import comprised 65 LNG cargoes of 138,000 cubic metres each, of which only one was sourced from the spot market, the official added.
The RPGCL, a wholly-owned subsidiary of Petrobangla, imported around 2.5 million tonnes of LNG from Qatargas and 1.5 million tonnes from Oman Trading under term deals in 2020.