None of the selected bidders responded to the government's call to supply liquefied natural gas (LNG) from the spot market in January.
The state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) had invited bids from a pool of 14 suppliers for delivery of LNG from spot market in January.
This is the first incident of not getting any bid against the RPGCL's call to import LNG from the spot market.
Vitol Asia Pte Ltd was the lone bidder, offering higher than expected prices from all the past several tenders, each involving 138,000 cubic metres of LNG cargo, said a senior energy ministry official.
The official could not say whether or not a re-tender will be launched for January delivery of spot LNG.
Vitol's offers were higher than both the term prices of LNG that Bangladesh imports from long-term contractors - Qatargas and Oman Trading International (OTI) - on the previous tenders.
Bangladesh could so far import only one 138,000 cubic metres of LNG cargo from the spot market, which was delivered on September 25.
Vitol Asia Pte delivered the lone LNG cargo from the spot market, carrying around 138,000 cubic metres of the fuel.
Re-gasified spot LNG entered the national gas grid immediately after the start of unloading.
Bangladesh could save around Tk 300 million (US$ 3.52 million) from the first cargo by purchasing LNG from spot market compared to the regular LNG market.
Vitol Asia had offered the best bid at $3.8321 per million British thermal unit (MMBTu) to bag the deal to supply its first LNG cargo to the country.
Bangladesh initiated importing LNG from spot market after two years of the country's first LNG cargo import in August 2018.
Global energy prices, including that of spot LNG, soared recently due to its booming demand in developed countries, including the US and Europe, due to the ensuing winter.
The RPGCL usually invites bids for spot LNG cargo from the 14 selected global LNG suppliers that 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 the US; Woodside Petroleum Ltd of Australia; Eni SpA of Italy; AOT Trading AG of Switzerland; Petronas LNG Ltd of Malaysia; and the joint venture of Summit Corporation Ltd and Summit Oil & Shipping Co Ltd of Bangladesh.
Currently, the country's LNG import price under a long-term deal with Qatargas and OTI ranges around $7.5-$8.0 per MMBtu, the RPGCL officials said.
Bangladesh now buys LNG under term deal from Qatargas under a 15-year contract, to import around 2.5 million tonnes of LNG every year. The agreed price of the fuel is 12.65 per cent of the three-month average price of Brent crude oil plus $0.5 constant per MMBTu.
The country also has a 10-year term-deal to import LNG from OTI at 11.9 per cent of the three-month average price of Brent crude oil plus a constant price of $0.40 per MMBTu.
Bangladesh has two operational FSRUs (floating, storage, and re-gasification units) to re-gasify imported LNG.
Each of the two operational FSRUs has the capacity to re-gasify around 500 million cubic feet per day (mmcfd) of LNG. Excelerate Energy started supplying re-gasified LNG commercially from its FSRU in August 2018, while Summit started supply in April 2019.
azizjst@yahoo.com