Bangladesh to source LNG from mid-term suppliers as demand grows

Bangladesh to source LNG from mid-term suppliers as demand grows

The government is planning to involve global LNG (liquefied natural gas) suppliers for the mid-term to meet the mounting demand for natural gas in the country.

State-run Petrobangla would import the fuel from such suppliers for a period from five to eight years under contract terms, a senior energy ministry official told the FE.

The official, however, did not elaborate the mechanism on how to select the suppliers.

Currently, Petrobangla is importing the LNG under the long-term deals from two suppliers — Qatar’s QatarGas and Oman’s Oman Trading International (OTI). Both suppliers were selected through negotiations.

The state-run oil, gas and mineral corporation is also importing LNG from the spot market through competitive biddings from 18 selected suppliers.

Petrobangla has planned to import a total of 64 LNG cargoes in 2021 from the term suppliers, which are two cargoes or 3.0 per cent less than that of the previous year.

It will import a total of 40 LNG cargoes from Qatargas and the remaining 24 from the OTI in 2021.

From the spot market, it will import a total of 18 LNG cargoes in 2021, which was only one cargo in 2020.

Petrobangla had imported 43 LNG cargoes from Qatargasin 2019 and 40 in 2020. It imported 26 LNG cargoes from OTI in 2020 and 20 in 2019.

Importing the significantly increased number of LNG cargoes from ‘volatile’ spot market might put the country’s future energy security at risk, said a Petrobangla official, stressing the need for involving some mid-term suppliers.

According to an estimation of the state-run Petrobangla, mounting natural gas consumption by the power plants and industries is expected to more than double the LNG import to around 2,000 million cubic feet per day (mmcfd) from the current consumption level of around 800mmcfd.

The currently operational two LNG import terminals, both are FSRUs, will re-gasify LNG to ramp up output to around 900 mmcfd until 2025.

LNG re-gasification will double to 2,000 mmcfd from 2025 with the commissioning of a proposed 7.5 million tonnes per year (Mtpa) land-based LNG import terminal at Moheshkhali island in the Bay of Bengal, said the official.

According to the estimation, natural gas demand in power plants will soar by 35.17 per cent to 1,764 mmcfd by 2021 and 51.72 per cent to 1,980mmcfd by 2025.

In industries, natural gas demand will soar by 42.04 per cent to 750 mmcfd by 2021 and 89.39 per cent to 1,000 mmcfd by 2025.

Fertilizer factories will also consume higher quantity of natural gas as Petrobangla has predicted that natural gas demand will soar by 42.85 per cent to 300 mmcfd by 2021 and 66.66 per cent to 350 mmcfd by 2025.

Natural gas demand in other sectors will also increase, it has been estimated.

Most of the additional natural gas will come as re-gasified LNG as domestic natural gas supply is depleting, said the Petrobangla official.

Currently, Petrobangla has a long-term deal with the Qatari LNG supplier to buy around 2.5 Mtpa of lean LNG over 15 years.

It has similar agreement with Oman’s firm to import annually around 1.0 Mtpa of LNG for 10 years.

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