A number of global LNG (liquefied natural gas) suppliers are keen to supply the fuel to Bangladesh from the spot market, seeing the country's consistent purchase of LNG over the past several months.
They are trying to get listed along with 14 short-listed LNG suppliers who are now being able to take part in bidding for supplying LNG from the spot market, a senior energy ministry official told the FE Wednesday.
The official, however, did not disclose the names of the firms that are lobbying to secure a space to supply LNG to Bangladesh from the spot market.
State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) received some half a dozen applications from such suppliers recently, said the official.
As per Investopedia, the spot market is where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument.
The 14 LNG suppliers that are allowed to bid for Bangladesh's spot tenders include Mitsui, Marubeni, Osaka Gas, Jera, Cheniere Marketing International, Vitol Asia, Trafigura, Diamond Gas International, Excelerate Energy, Woodside Petroleum, Eni, AOT Trading, Petronas, and the joint venture of Summit Corp and Summit Oil & Shipping of Bangladesh.
The RPGCL selected these firms following tender procedure and inked master sale and purchase agreements (MSPAs) separately to take advantage of low priced spot market of the fuel and meet the country's growing demand.
It has been floating tenders since August 2020 to purchase LNG from the spot market under a government plan to meet around one-fourth of the country's total LNG requirements from the spot market.
The country has started importing LNG from the spot market since September 2020.
The imported spot LNG is blended with locally produced natural gas, which is sulphur free and sweet gas, before it is delivered to the end-user.
The gross heating value of the imported LNG ranges 1,025-1,100 British thermal unit (Btu) per standard cubic feet.
Spot LNG is supplied on a delivered ex-ship basis and the vessel size should range between 125,000 and 220,000 cubic metre.
The RPGCL are procuring 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 as of March 17, 2020.
Officials said more firms are also keen separately to secure long-term deals with Bangladesh and consistently supply the fuel ensuring a stake in the country's booming energy sector.
They include Indonesia's Petramina, Malaysia's Petronas, Brunei's Brunei LNG, and Switzerland's AOT Energy AG.
Currently, the country is importing LNG under long-term deals from two global suppliers - Qatar's Qatargas and Oman's Oman Trading International.
Petrobangla started regular imports of LNG from September 9, 2018.
azizjst@yahoo.com