State-run Petrobangla has planned to start importing lean LNG from Oman Trading International (OTI) by May 2019, one year after inking a sales and purchase agreement (SPA).
Petrobangla and OTI agreed last week to initiate LNG import and re-gasify it in the FSRU at Moheshkhali Island in the Bay of Bengal, a senior Petrobangla official said.
The LNG (liquefied natural gas) would be imported from the middle-eastern firm OTI under the country's second long-term LNG import contract.
Petrobangla and OTI entered into the SPA on May 6, 2018 to import around 1.0 million tonnes per year (Mtpa) of LNG for 10 years.
It inked the first SPA with Qatar's RasGas on September 25, 2017 to buy 2.5 Mtpa of lean LNG over 15 years.
Bangladesh started regular imports of LNG from RasGas around one year after inking the SPA from September 9.
Petrobangla's SPA with OTI is under a delivery ex-ship arrangement, with the price including transportation costs for LNG to be delivered to the terminal.
Under the deal, the base quantity of 500,000 tonnes per year is subject to the completion of the first LNG terminal and another 500,000 tonnes per year is subject to the completion of the second terminal owned by Summit Group.
Excelerate Energy's floating, storage and re-gasification unit Excellence, the Bangladesh's first LNG import facility for re-gasification, started commercial operation on August 18.
The second FSRU is expected to come online by April, 2019.
The purchase price of LNG from Oman Trading has been set at around 11.9 per cent of the three-month average of Brent crude prices plus 40 cents per million British thermal unit (MMBtu).
Users in Chattogram are currently consuming around 300 million cubic feet per day (mmcfd) of re-gasified gas.
Apart from the SPAs with RasGas and OTI, Petrobangla also has a preliminary agreement with Switzerland-based private firm AOT Energy to import around 1.25 Mtpa of lean LNG for 15 years.
It also signed a letter of intent with Indonesia's Pertamina to import around 1.0 Mtpa of LNG over 10 years.
Petrobangla also has shortlisted over two dozen LNG suppliers to purchase LNG on a spot basis.
The country would require importing around 30 Mtpa of LNG to meet the mounting demand from various sectors including industries, power plants and fertiliser plants 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.
Country's current natural gas production is hovering around 3,050 mmcfd, including re-gasified imported LNG, against the demand for 3,960 mmcfd, according to Petrobangla.
