Gunvor Joins Bangladesh LNG Supply Queue

Gunvor inked a memorandum of understanding with state-run Petrobangla to supply LNG to the emerging Bangladesh market in Dhaka September 19, making it the fifth such company.

After inking the first-ever MOU to import LNG with Qatar in 2011, Bangladesh inked MOUs with Switzerland-based AOT Energy on June 13, 2017, Oman in early September and Indonesia on September 15.

Bangladesh has moved to import LNG to ensure uninterrupted re-gasified LNG supplies to consumers, said state minister for the MPEMR Nasrul Hamimd. 

Regarding signing of so many MOUs, Petrobangla chairman Abul Mansur Md Faizullah said: ” We like to diversify LNG sources to ensure availability of LNG smoothly so that the country does not face any unforeseen crisis.”

Petrobangla is expected to seal Bangladesh’s first-ever final deal to import LNG with Qatar next week, which is for 2.5mn mt/year of lean LNG from RasGas over 15 years.

The purchase price has been set at around 12.65% of the three-month average Brent crude prices plus $0.50/MMBtu, said a senior official at the energy ministry.

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.

The RasGas supply will take up a third of Bangladesh's LNG handling capacity of 7.5mn mt/year, which will be ready following the 2018 commissioning of two floating storage and regasification units.

Bangladesh is planning to start LNG imports in early 2018 and is making concerted efforts to move forward with LNG import infrastructure. Bangladesh’s natural gas production is hovering around 2.7bn ft³/d against potential demand for over 3.3bn ft³/d, according to Petrobangla.

M Azizur Rahman