Vitol Asia to supply lone Nov spot LNG

Bangladesh is set to import a single spot liquefied natural gas (LNG) cargo from Vitol Asia Pte Ltd for delivery to the Moheshkhali floating storage and regasification unit (FSRU) on November 12-13.

Vitol offered the lowest bid of $17.55 per million British thermal units (MMBtu) for one LNG cargo in Bangladesh's latest spot tender, a senior Petrobangla official told the FE on Tuesday.

The tender closed on October 22 and Vitol is set to deliver the spot LNG cargo to Bangladesh's FSRU, supplying around 3.36 million MMBtu, the official said.

Two other LNG suppliers -- PetroChina and Excelerate Energy -- also submitted bids in the tender, which was issued a week ago, he added. The highest bid on offer was around $20 per MMBtu.

Bangladesh's cabinet committee on government purchases is set to approve awarding the LNG supply deal to Vitol during a meeting scheduled for later this week, the official added.

With the November 12-13 LNG cargo, Bangladesh's total LNG import from the spot market will be ten since July in the current fiscal year 2023-2024, the official added.

The Rupantarita Prakritik Gas Company Limited (RPGCL) has planned to import one more LNG cargo from the spot market in December ahead of the country's next general election slated for January 2024, according to an official.

Previously, it had planned to import a total of nine spot LNG cargoes from July to December, he said. But Bangladesh has already purchased all nine previously allocated spot LNG cargoes until October, two months ahead of the December timeline.

The South Asian country imported a total of 12 spot LNG cargoes during the February-June period after resuming its spot LNG imports following a seven-month hiatus.

Bangladesh previously awarded two tenders for October deliveries. Of these, Gunvor Singapore Pte Ltd supplied one spot LNG cargo at US$14.87 per MMBtu for October 11-12 delivery to the Moheshkhali FSRU. Singapore's Vitol Asia will supply another spot LNG cargo for October 25-26 deliveries into Moheshkhali FSRUs at US$14.90 per MMBtu, said a senior Petrobangla official.

Until September 2023, Bangladesh has imported a total of 48 spot LNG cargoes since it began importing spot LNG on September 25, 2020, according to RPGCL data.

Separately, the country will import a total of four LNG cargoes in November - three from Qatargas and one from OQ Trading, formerly known as Oman Trading International - which is 20 per cent lower than the five LNG cargo imports from term suppliers in October, according to Petrobangla.

Petrobangla signed its first-ever long-term sale and purchase agreement (SPA) with Qatar's RasGas, later renamed Qatargas, on September 25, 2017, to buy up to 2.5 million tonnes per annum (MTPA) of lean LNG over 15 years.

During the first five years of the deal, QatarGas will supply around 1.8 Mtpa LNG annually, increasing to 2.5 Mtpa in the next 10 years, according to the deal.

The purchase price is set at around 12.65 per cent of the three-month average price of Brent crude oil plus US$0.50 per MMBtu and payments are to be made within 15 days of delivery.

If the corporation has more demand during the first five years, it can increase the annual LNG import volume to 2.5 Mtpa. During the next 10 years, it has the option to reduce the amount by 10 per cent per annum.

If Bangladesh takes less than the base amount of LNG in any year, it will have to pay the price on a take-or-pay basis.

The second SPA was signed with OQ Trading to import around 1.0 Mtpa of LNG for 10 years.

Petrobangla is purchasing LNG at around 11.9 per cent of the three-month average of Brent crude oil prices plus $0.40 per MMBTu, and payments are to be made within 25 days of delivery.

The deal includes the option to increase LNG imports to 1.5 Mtpa or lower them to 0.9 Mtpa without penalty.

Despite payment delays, Bangladesh is continuing to import LNG from both long-term and spot suppliers, an official said.

azizjst@yahoo.com