LNG deal with Qatar firm today

The government will soon finalise a deal with Ras Gas, a company of the Qatar government, with the aim to import 500 MMCF of liquefied natural gas (LNG) from Qatar next April to meet the country’s gas demand. The imports will have a USD 1.5-billion annual bill. The deal will be signed between Petrobangla, the state-run oil, gas and mineral resources corporation, and Ras Gas. A team headed by Abul Mansur Md Faizullah, the chairman of Petrobangla, has already left Dhaka for Qatar to finalise the deal. The state minister for energy, Nasrul Hamid, is scheduled to join the programme in Qatar today. “As a professional, I cannot disclose the LNG purchase price to the public because this is our commitment to the international market. But we can say the price is very competitive,” the Petrobangla chairman told The Independent recently.

Sources in the Energy Division disclosed that as of the current international market, the price of LNG per unit would be USD 7 or Tk. 56, but the average cost per unit of local gas is Tk. 7.50.

Sources said LNG imports could relieve the crisis but would cause tension to the country’s people since the gas price would go up when the LNG is injected into the national grid. The government has already hinted to the business community about the gas price hike in the coming days. The blending price of gas after the injection of LNG would exceed Tk. 14 per unit.

One of Petrobangla’s directors told The Independent last week that “they are preparing a proposal of gas price hike up to 100 per cent that could be submitted to the Bangladesh Energy Regulatory Commission (BERC)”.    

“We need 3.7 million tonnes of LNG per year. We will import 2.5 million tonnes from Qatar and buy the remainder from the international open market. In that way, we can compare the prices,” said an Energy Division official involved in the LNG project. In the international market, the current LNG price is USD 6–7 per unit.

The US-based Excelerate Energy is setting up Bangladesh’s first LNG terminal, which will handle 500 MMCF of the imported LNG and supply it to the national grid from early 2018. Petrobangla has to finalise the import chain before scheduling the imports.

The Gas Transmission Company is at present building a pipeline from Moheshkhali to Chittagong to transmit the imported gas. The Cabinet Committee on Purchases last month approved the proposal to import LNG from Ras Gas.

The proposal stipulates that for the first five years of the contract, Ras Gas will supply 1.8 million tonnes of LNG each year, which will go up to 2.5 million tonnes in the following 10 years.

The LNG would be supplied at 12.65 per cent of the three-month average price of Brent oil plus USD 0.50 constant per MMBTu (1 million British thermal units).

LNG deal with Qatar firm today

The government will soon finalise a deal with Ras Gas, a company of the Qatar government, with the aim to import 500 MMCF of liquefied natural gas (LNG) from Qatar next April to meet the countrys gas demand. The imports will have a USD 1.5-billion annual bill. The deal will be signed between Petrobangla, the state-run oil, gas and mineral resources corporation, and Ras Gas. A team headed by Abul Mansur Md Faizullah, the chairman of Petrobangla, has already left Dhaka for Qatar to finalise the deal. The state minister for energy, Nasrul Hamid, is scheduled to join the programme in Qatar today. As a professional, I cannot disclose the LNG purchase price to the public because this is our commitment to the international market. But we can say the price is very competitive, the Petrobangla chairman told The Independent recently. Sources in the Energy Division disclosed that as of the current international market, the price of LNG per unit would be USD 7 or Tk. 56, but the average cost per unit of local gas is Tk. 7.50. Sources said LNG imports could relieve the crisis but would cause tension to the countrys people since the gas price would go up when the LNG is injected into the national grid. The government has already hinted to the business community about the gas price hike in the coming days. The blending price of gas after the injection of LNG would exceed Tk. 14 per unit. One of Petrobanglas directors told The Independent last week that they are preparing a proposal of gas price hike up to 100 per cent that could be submitted to the Bangladesh Energy Regulatory Commission (BERC). We need 3.7 million tonnes of LNG per year. We will import 2.5 million tonnes from Qatar and buy the remainder from the international open market. In that way, we can compare the prices, said an Energy Division official involved in the LNG project. In the international market, the current LNG price is USD 67 per unit. The US-based Excelerate Energy is setting up Bangladeshs first LNG terminal, which will handle 500 MMCF of the imported LNG and supply it to the national grid from early 2018. Petrobangla has to finalise the import chain before scheduling the imports. The Gas Transmission Company is at present building a pipeline from Moheshkhali to Chittagong to transmit the imported gas. The Cabinet Committee on Purchases last month approved the proposal to import LNG from Ras Gas. The proposal stipulates that for the first five years of the contract, Ras Gas will supply 1.8 million tonnes of LNG each year, which will go up to 2.5 million tonnes in the following 10 years. The LNG would be supplied at 12.65 per cent of the three-month average price of Brent oil plus USD 0.50 constant per MMBTu (1 million British thermal units).