Petrobangla should import LNG (liquefied natural gas) from spot market to trim down the escalating costs of LNG imports, market insiders said.
Bangladesh's full reliance on term dealers for LNG is shooting up import costs, they added.
Spot market is a public financial market in which financial instruments or commodities are traded for immediate delivery.
Petrobangla has been importing LNG for more than one year since April 24, 2018, when the first shipment reached Moheshkhali Island in the Bay of Bengal.
LNG is regasified at FSRUs (floating, storage, re-gasification units) before it is added to the national grid.
Bangladesh imports LNG from RasGas of Qatar and Oman Trading International (OTI) of Oman under term deals.
Petrobangla has sales and purchase agreements (SPAs) with RasGas to import 2.5 million tonnes per year (Mtpa) of lean LNG over 15 years.
It has an SPA with the Omani company to import around 1.0 Mtpa of lean LNG for 10 years.
The SPAs are under 'delivered ex-ship' arrangement, meaning that LNG prices include transportation cost for delivery at an agreed terminal.
LNG from RasGas has been priced at around 12.65 per cent of the three-month average of Brent crude benchmark prices plus 50 cents per million British thermal unit (MMBtu).
On the other hand, gas 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 MMBtu.
With volatile global oil market, LNG import prices for Petrobangla have varied within the range from around $8.5 per Mmbtu to $10 per Mmbtu in the past one year.
But market insiders said Asian spot prices for LNG dropped significantly over the year due to a global supply glut.
Sources said Platts JKM, which represents the prices of spot cargoes delivered to northeast Asia, averaged around $6.62 per MMBtu in the first quarter of 2019.
Two terminals, owned by US-based Excelerate Energy and local Summit Group, are regasifying around 557 million cubic feet per day (mmcfd) in total as of May 28, according to Petrobangla.
Both the FSRUs have the capacity to regasify around 1,000 mmcfd of LNG, said a senior Petrobangla official.
To reap the benefits of lower spot prices, Prof Ijaz Hossain of Bangladesh University of Engineering and Technology sought a mixture in LNG import mechanism. Petrobangla should import at least 30 per cent of its LNG requirement from spot market, he told the FE.
"Why should we pay more when cheaper LNG is available on the spot market?" questioned energy expert Prof Badrul Imam who teaches geology at Dhaka University.
With the existing pipeline network, officials said, some 600 mmcfd could be evacuated in maximum from the FSRUs against their full capacity of 1,000 mmcfd.
Petrobangla would have to pay 'capacity charge' for around 400 mmcfd until infrastructure gets ready, they added.
The construction of two major pipelines -- one 42-inch 90km pipeline from Moheshkhali to Anwara and another 36-inch 181km Chattogram-Feni-Bakhrabad -are required to evacuate around 1,000 mmcfd of LNG.
