Bangladesh may cancel Nov LNG import tender after receiving high offers
Vitol submitted the lowest offer but it was still higher than the prices of LNG that Bangladesh pays under long-term contracts with Oman and higher than the price of an earlier spot cargo, said the officials
DHAKA: Bangladesh may cancel a tender to import liquefied natural gas (LNG) in November, after receiving offers to supply the shipments that were too expensive, two energy officials with direct knowledge of the matter said on Monday.
State-run Rupantarita Prakritik Gas Company, which is in charge of LNG imports into the country, received offers from the Asian unit of Vitol and Swiss trader AOT Energy to supply 138,000 cubic metres of LNG for Nov. 12-13 delivery, said the two officials, who work for Rupantarita.
Vitol submitted the lowest offer but it was still higher than the prices of LNG that Bangladesh pays under long-term contracts with Oman and higher than the price of an earlier spot cargo, said the officials. Bangladesh imported 3.89 million tonnes of LNG in 2019 under its long-term contracts with Oman Trading International and Qatar gas, with price ranges of about $5.50 to $6 per million British thermal units (mmBtu).
However, prices for spot cargoes, or shipments typically for next month delivery, are gaining on expectations that colder weather during the Northern Hemisphere winter will increase LNG demand for heating.
Spot LNG prices for Asia were estimated at $5.80 per mmBtu as of Friday, their highest in more than 11 months.
The November cargo was expected to be the second one Bangladesh would purchase in the spot market.
Rupantarita bought Bangladesh’s first spot LNG cargo ever from Vitol at $3.8321 per mmBtu for delivery over late September to early October.
Bangladesh, with a population of about 160 million people, is set to become a major LNG importer in Asia as domestic gas supplies fall.
The country currently has two floating storage and regasification units with a total regasification capacity of 1 billion cubic feet per day, equal to about 7.5 million tonnes a year.