State-run Petrobangla bids for making deals with local Summit Group and Middle East's Emirates' National Oil Company (ENOC) for long-term LNG supply sans biddings, sources say.
Both the firms, alongside half a dozen more companies, had earlier proposed to supply liquefied natural gas or LNG under long-term arrangements, said a senior Petrobangla official.
But the energy and mineral resources division under the Ministry of Power, Energy and Mineral Resources (MPEMR) has instructed the petroleum agency to open negotiations with Summit and ENOC, in what appears to be a pick-and-choose manner.
Currently, the country imports LNG under long-term deals from two state-run global suppliers -- Qatar's Qatargas and Oman's Oman Trading International (OTI).
Of them, OTI also offered to double its LNG supply to Petrobangla to 2.0 million tonnes per year (Mtpa) from its existing supply deal for 1.0 Mtpa under similar terms.
Petrobangla has not responded to the OTI proposal as yet.
Qatargas, however, is yet to place any proposal to augment its LNG supply to Bangladesh, said the official.
Excelerate Energy of the United States and Switzerland's AOT Energy AG also are interested in supplying LNG to Petrobangla under agreements for longer terms.
They are also keen to ink deals with Petrobangla under the Speedy Supply of Power and Energy (Special Provision) Act 2010.
The law provides immunity to those involved with a quick-fix solution worked out when there were urgencies created by energy shortages in catering growing needs.
Of the two firms that await negotiation with Petrobangla to supply LNG under long-term arrangements, Summit owns an FSRU facility on the bay island Moheshkhali for floating storage and supply.
Officials say global firms "are in queue to supply LNG under long-terms seeing its mounting demand in Bangladesh".
Bangladesh started importing LNG on April 24, 2018, with the arrival of US energy giant Excelerate Energy's "Excellence" with 136,000 cubic metres of lean LNG from Qatar at its Moheshkhali Island terminal.
Currently, around 640 million cubic feet per day (mmcfd) of regasified LNG is being supplied into the national grid from two operational FSRUs at Moheshkhali.
Bangladesh will need to import around 30-MTPA LNG to meet the growing local demand by 2041 as domestic gas reserves are depleting fast, according to a report prepared by Copenhagen-based research firm Ramboll in association with Geological Survey of Denmark and EQMS Consulting Limited.
"The country's existing gas reserves will run out by 2038 if no new exploration and discovery take place," says the report.
Bangladesh's current natural gas production from domestic fields is hovering around 2,400 mmcfd against the overall demand for around 4,000 mmcfd, according to Petrobangla.
This deficit has to be met by imports, the report says.
By 2041, the demand for natural gas would be around 8,000 mmcfd, Petrobangla has predicted.
Petrobangla inked first-ever sales and purchase agreement with Qatar's RasGas, later renamed Qatargas, on September 25 last year to buy annually around 2.5 million tonnes per year (Mtpa) of lean LNG over 15 years.
During the initial five years of the deal, QatarGas will supply annually around 1.8 Mtpa of LNG, which will be increased up to 2.5 Mtpa in next 10 years.
The purchase price has been set at around 12.65 per cent of the three-month average price of Brent crude oil plus US$ 0.50 constant per MMBtu (million British thermal unit).
If Petrobangla has more demand during the first five years, it can increase the LNG-import volume annually to 2.5 Mtpa, and during the next 10 years Petrobangla has the option to reduce the amount by 10 per cent every year.
If Bangladesh takes less than the base amount of LNG, in any year, it will have to pay the price on a take-or-pay basis.
Petrobangla has a similar SPA with Oman's OTI to import annually around 1.0 Mtpa of LNG for 15 years.It is purchasing LNG at around 11.9 per cent of the three-month average of Brent crude oil prices plus $ 0.40 cents per mmBtu from OTI, and the payments are to make within 25 days of delivery.
Petrobangla has the option of increasing LNG import to 1.5 Mtpa or lowering it to 0.9 Mtpa without having to pay any penalty.
Currently, the agency is importing around five to six LNG cargoes, having the quantity of around 138,000 cubic metres, every month.
