Bangladesh Readies Market for First LNG

Bangladesh is readying LNG import sources, terminals and adopting favourable tax measures to allow for the smooth entry of the fuel from early 2018 to meet the mounting natural gas demand in energy-intensive industries.

The south Asian country in late June finalised preliminary government-to-government negotiations with Qatar's RasGas to import 2.5mn mt/year of lean LNG for 15 years from early 2018, Petrobangla chairman Abul Mansur Md Faizullah told NGW July 7. 

An initial agreement will be signed in July with a final sales and purchase agreement (SPA) slated to be inked in August after receiving approval from the country's cabinet committee, he said. This will be Bangladesh's first long-term LNG contract.

State-owned Petrobangla has also signed an LNG MOU with Switzerland-based AOT Energy on June 13, with an SPA due to be signed by year end and it also recently issued an international tender seeking expressions of interest to supply LNG on a spot basis. 

Petrobangla's contract with RasGas will likely be priced against international crude oil benchmarks, said Petrobangla's LNG Cell manager Kazi Md Anwarul Azim, who took part in negotiations with RasGas in June. But Azim said the company was open to pricing future deliveries with a link to other indexes such as the Platts Japan Korea Marker, a daily physical spot market price assessment for LNG delivered to Japan, South Korea, China and Taiwan.

Petrobangla is also in talks separately with other LNG suppliers such as US-based Cheniere, Australia 's Woodside, Russia's Gazprom, Indonesia 's Pertamina, Oman LNG and with energy traders Vitol, Gunvor and Glencore. It plans to release in August a shortlist of prospective sellers who will then be invited to submit expressions of interest to supply LNG to Bangladesh.

M Azizur Rahman