October 29, 2018 [S&P Global Platts] - Bangladesh is expecting first lean LNG imports from Oman Trading International from May 2019, as part of a sales and purchase agreement signed in May 2018 for 1 million mt/year of LNG over 10 years, managing director with state-owned Rupantorita Praktritik Gas Company Md Quamruzzaman said Tuesday.
This will be Bangladesh’s second long-term LNG contract, as the south Asian country seeks to bridge the widening gap between depleting domestic gas reserves and growing consumption from the industry, power plants and fertilizer sectors.
RPGCL, a wholly owned subsidiary of Petrobangla in charge of Bangladesh’s LNG imports, and OTI agreed last week the start date of the supply deal, Quamruzzaman said.
The SPA was priced at around 11.9% of the three-month average of Brent crude oil prices plus 40 cents/MMBtu, and states that payments are to be made within 25 days of delivery.
The deal comes with a degree of volume flexibility. Petrobangla has the option of increasing LNG imports to 1.5 million mt/year, or lowering it to 900,000 mt/year without having to pay penalties.
Excelerate Energy’s floating, storage and regasification unit Excellence, Bangladesh’s first LNG import facility, started commercial operations in August, while the second FSRU, owned by Summit Group, is expected to come online by April 2019.
Bangladesh received first LNG from its 15-year contract with Qatar’s RasGas in September. The contract, for 2.5 million mt/year of LNG, was priced at 12.5% of the three-month average of Brent crude plus a 0.5% constant.
Petrobangla also has a preliminary agreement with Switzerland-based AOT Energy for 1.25 million mt/year over 15 years, and Indonesia’s Pertamina for 1 million mt/year over 10 years.
Bangladesh has also shortlisted another two dozen LNG suppliers to purchase LNG on a spot basis, Quamruzzaman said.
Bangladesh’s current natural gas production is hovering around 2.75 Bcf/d, against demand of nearly 4 Bcf/d, according to Petrobangla, and the country’s LNG consumption is expected to reach 30 million mt/year by 2041, according to a recent report prepared by Copenhagen-based research firm Ramboll in association with Geological Survey of Denmark and EQMS Consulting Limited.
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