LNG import from spot market soon

The government has decided to import liquefied natural gas (LNG) from the international spot market through private companies for the first time to meet the immediate crisis of natural gas, especially with industrial demand burgeoning. Sources said Petrobangla, the state-owned oil and gas corporation, has already selected 15 international companies based in Singapore. “We have instructed the authorities to finalise all the preparations to import LNG from the spot market,” said Nasrul Hamid, state minister for power and energy. “We are fully ready to import any amount of LNG from the spot market to meet the demand,” said a Petrobangla official.

Petrobangla currently imports LNG from RasGas, Qatar’s state-run company, to meet local demand. Under the contract with RasGas, Bangladesh will import 1.8 to 2.5 million tonnes annually from the company. “That LNG is being regasified through the floating storage and regasification unit (FSRU) operated by Excelerate Energy Bangladesh Ltd, which has a capacity of 500 mmcf per day.

But because of the subsidy and the government’s policies, Petrobangla does not fully utilise the FSRU capacity to meet the demand,” said a government official.  

Data showed that Petrobangla recently supplied 350 mmcf per day of LNG to the grid. But after the Summit Group’s FSRU comes into operation this April, the government will have 1,000 mmcf per day of LNG supply capacity to meet the demand. A total of 10.80 million tonnes of LNG would have to be imported.

“If we connected some 3,000 industries that were approved last year and are awaiting gas connections, we will have to supply more than 1,000 mmcf gas per day,” a Petrobangla official disclosed. Petrobangla currently supplies 3,065 mmcf gas per day.

“The main challenge is the price of LNG. Right now, the local gas price is only Tk. 7 per unit. But if you mixed 1,000 mmcf gas with the local gas, the price would be more than Tk. 12. Hence, it needs to be adjusted. Yet, there is no sign of adjustment,” the government official told The Independent.

As per the government’s vision, there will be 100 economic zones in the country, and so, the demand for gas will remain unchanged.Bangladesh received its first consignment of LNG in the gridline on 12 August, 2018.

Petrobangla signed a terminal use agreement with Excelerate Energy Bangladesh Ltd to set up the country’s first LNG terminal on March 31, 2016. As per the agreement, the company was supposed to facilitate supplies of LNG to the shore. The country’s first FSRU is being established on a build-own-operate-and-transfer (BOOT) basis. The operator will be exempt from tax payments on the income from the project.

IK/SI

 

LNG import from spot market soon

The government has decided to import liquefied natural gas (LNG) from the international spot market through private companies for the first time to meet the immediate crisis of natural gas, especially with industrial demand burgeoning. Sources said Petrobangla, the state-owned oil and gas corporation, has already selected 15 international companies based in Singapore. We have instructed the authorities to finalise all the preparations to import LNG from the spot market, said Nasrul Hamid, state minister for power and energy. We are fully ready to import any amount of LNG from the spot market to meet the demand, said a Petrobangla official. Petrobangla currently imports LNG from RasGas, Qatars state-run company, to meet local demand. Under the contract with RasGas, Bangladesh will import 1.8 to 2.5 million tonnes annually from the company. That LNG is being regasified through the floating storage and regasification unit (FSRU) operated by Excelerate Energy Bangladesh Ltd, which has a capacity of 500 mmcf per day. But because of the subsidy and the governments policies, Petrobangla does not fully utilise the FSRU capacity to meet the demand, said a government official. Data showed that Petrobangla recently supplied 350 mmcf per day of LNG to the grid. But after the Summit Groups FSRU comes into operation this April, the government will have 1,000 mmcf per day of LNG supply capacity to meet the demand. A total of 10.80 million tonnes of LNG would have to be imported. If we connected some 3,000 industries that were approved last year and are awaiting gas connections, we will have to supply more than 1,000 mmcf gas per day, a Petrobangla official disclosed. Petrobangla currently supplies 3,065 mmcf gas per day. The main challenge is the price of LNG. Right now, the local gas price is only Tk. 7 per unit. But if you mixed 1,000 mmcf gas with the local gas, the price would be more than Tk. 12. Hence, it needs to be adjusted. Yet, there is no sign of adjustment, the government official told The Independent. As per the governments vision, there will be 100 economic zones in the country, and so, the demand for gas will remain unchanged.Bangladesh received its first consignment of LNG in the gridline on 12 August, 2018. Petrobangla signed a terminal use agreement with Excelerate Energy Bangladesh Ltd to set up the countrys first LNG terminal on March 31, 2016. As per the agreement, the company was supposed to facilitate supplies of LNG to the shore. The countrys first FSRU is being established on a build-own-operate-and-transfer (BOOT) basis. The operator will be exempt from tax payments on the income from the project. IK/SI