Bangladesh Inks RasGas Deal
Bangladesh’s state-owned Petrobangla inked September 25 the country’s first-ever sales and purchase agreement with Qatar's RasGas to buy 2.5mn mt/year of lean LNG for 15 years, a senior official at the energy and mineral resources division under the energy ministry told NGW. The purchase price has been set at around 12.65% of the three-month average Brent crude prices plus 50 cents/mn Btu, he said.
At current levels the LNG price would be around $6.50/mn Btu, he added – almost three times the weighted average price of natural gas price in Bangladesh at $2.19/mn Btu. Petrobangla has, however, options to review the terms of conditions with RasGas after nine years. The minimum amount it must take from RasGas is 1.8mn mt/year before running into take-or-pay issues, he added.
Petrobangla Chairman Abul Mansur Md Faizullah and RasGas CEO Hamad Rashid Al-mihammadi inked the SPA in Hotel Sheraton in the Qatari capital Doha, the official added.
Bangladesh has moved to import LNG to ensure uninterrupted re-gasified LNG supplies to consumers, state minister for the MPEMR Nasrul Hamimd said.
Energy co-operation with Bangladesh would continue, said the Qatari minister. with Qatar helping it develop human resources and training, he added.
The supply from RasGas will require a third of Bangladesh's total LNG handling capacity of around 7.5mn mt/year, which will be ready following the 2018 commissioning of two floating, storage and regasification units.
The quantity could be increased later as the deal is flexible, said the official. Bangladesh will be able to ink more deals to bring enhanced quantity of natural gas from RasGas, like the agreements inked by Pakistan and India, he added. Bangladesh will be importing lean LNG, in line with the type of natural gas produced from the country's domestic fields. The lean LNG will be blended with domestic gas before delivery to end-users, said the official.
The imported LNG should have a gross heating value within the range of 1,025-1,100 Btu/ft³, he added. Since the imported LNG is to be blended with sulphur-free, sweet gas produced domestically, the sulphur content in the imported LNG should be low, he added.
Bangladesh is, however, eyeing to ink more SPAs soon and it is in talks with four other potential LNG suppliers with whom it has inked MOU to import LNG, said a senior Petrobangla official.
Separately, Bangladesh is seeking to import spot LNG from suppliers taking advantage of the downtrend in LNG pricing in global market. It is planning to start LNG imports in early 2018 and is making concerted efforts to move forward with LNG import infrastructure.
M Azizur Rahman