Four global LNG suppliers in queue to supply maiden spot LNG cargo
Four global LNG (liquefied natural gas) suppliers are in queue to supply the maiden cargo of the fuel from international spot market.
State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) received bids from only four suppliers out of 14 short-listed firms that showed interests to supply LNG from spot market, a senior Energy ministry official told the FE.
The official did not disclose the names of the LNG suppliers that submitted bids on close of the submission deadline on August 17.
“We are now evaluating their bids, which include price and other necessary issues,” he said.
Bangladesh is eyeing to initiate importing LNG from spot market from late September to early October to rip the benefit of low price of the fossil fuel in international market.
“Initially we shall import one cargo carrying 138,000 cubic metres of lean LNG,” RPGCL, managing director Md Kamruzzaman had said earlier.
The government earlier constituted several committees to ensure smooth start of LNG import from the spot market.
The RPGCL, assigned to look after LNG import issues, earlier signed the master sale and purchase agreement (MSPA) with 14 firms separately in efforts to take advantage of low prices of the fuel in the spot market and meet the country’s growing demand.
The firms with whom the MPSAs have been signed include Mitsui & Co Ltd, Marubeni Corporation, Osaka Gas Co Ltd, and Jera Co Inc. of Japan; Cheniere Marketing International LLP, Vitol Asia Pte Ltd, Trafigura Pte Ltd, and Diamond gas International Pte Ltd of Singapore; Excelerate Energy Ltd Partnership of USA, Woodside Petroleum Ltd of Australia, Eni S.p.A of Italy, AOT Trading AG of Switzerland, Petronas LNG Ltd of Malaysia, and the joint venture of Summit Corporation Ltd & Summit Oil & Shipping Co Ltd of Bangladesh.
Spot LNG prices have plunged to historic lows this year on the back of lower demand due to milder-than-usual winter coupled with the Covid-19 outbreak and increased supply from the US and Australia.
Purchasing LNG from the spot market will help diversify the LNG sourcing as well.
Currently, Bangladesh has been importing lean LNG under long-term deals from Qatar’s RasGas, which has recently merged with Qatargas and is renamed Qatargas, and the Oman Trading International, or OTI, of Oman.
The country started regular imports of LNG on September 9, 2018.
Spot LNG providers will supply the fuel to the country’s LNG-receiving terminals from time to time as per instructions, depending on the demand.
The RPGCL would initially place proposals to these firms, specifying the quantity of spot LNG, for supplying to the LNG terminals.
The imported spot LNG would require to be blended with locally produced natural gas, which is sulphur-free and sweet gas, before it is delivered to end-users.
As a result, the imported LNG’s sulphur content would be low.
The imported spot LNG should have a gross heating value ranging between 1,025 and 1,100 Btu per standard cubic feet.
Spot LNG should be supplied on a delivered ex-ship basis and the vessel size should range between 125,000 and 220,000 cubic metres.
RPGCL will procure spot LNG based on market prices, terminal availability, increased re-gasification capacity and downstream demand.
Currently, two FSRUs, owned by US-based Excelerate Energy and local Summit Group, are re-gasifying around 600 million cubic feet per day (mmcfd) of LNG.
Both the FSRUs have the capacity to re-gasify around 500 mmcfd of LNG each.
Bangladesh imports around five to six cargoes from term suppliers Qatargas and OTI every month to meet mounting natural gas demand.
Source: Financial Express