DHAKA: Bangladesh inked a memorandum of understanding Friday for LNG imports from Indonesia, an official at Bangladesh’s Ministry of Power, Energy and Mineral Resources said Friday, as the country continues to seek out supplies to meet mounting domestic demand.
Bangladesh’s state minister for the MPEMR, Nasrul Hamid, inked the MOU with Indonesia’s energy and mineral resources minister Ignasius Jonan in Jakarta, the official said. He said state-run Petrobangla will initiate negotiations with its Indonesian counterpart Pertamina in the near future on volumes, prices and specifications for the imports. Imports of at least 1.0 million mt/year of lean LNG could start from next year under a term deal, said a senior Petrobangla official. After inking its first-ever LNG import MOU with Qatar in 2011, Bangladesh has agreed a couple of other MOUs for supply recently — with Switzerland-based AOT Energy on June 13 and with Oman in early September.
Petrobangla is expected to seal a final deal to import LNG with Qatar this month. The deal is for 2.5 million mt/year of lean LNG from Qatar’s RasGas over 15 years, Petrobangla chairman Abul Mansur Md Faizullah said previously. The purchase price has been set at around 12.65% of the three-month average Brent crude prices plus $0.50/MMBtu, said a senior official at the energy ministry’s Energy and Mineral Resources Division. At current levels the LNG price would be around $6.50/Mcf, he added, almost three times the weighted average price of natural gas price in Bangladesh at $2.19/Mcf.
The RasGas supply will take up a third of Bangladesh’s LNG handling capacity of 7.5 million mt/year, which will be ready following the 2018 commissioning of two floating storage and regasification units. Separately, Bangladesh is seeking to import spot LNG from suppliers taking advantage of the downtrend in LNG pricing in global market. Rupantarita Prakritik Gas Company Ltd, or RPGCL, a wholly owned subsidiary of Petrobangla in charge of the country’s LNG purchases, will short-list around a dozen LNG suppliers from the expressions of interests submitted by 39 global firms on August 17. Bangladesh has not disclosed specifications for spot LNG but a Petrobangla official said they would be similar to those for term LNG. Under the specifications, the imported LNG should have a gross heating value within the range of 1,025-1,100 Btu/scf, RPGCL managing director Quamruzzaman said previously, which could be problematic for exporters of lean LNG from Australia’s Queensland or rich LNG from the Middle East. Since the imported LNG is to be blended with sulfur-free, sweet gas produced domestically, the sulfur content in the imported LNG should be low, Quamruzzaman said.
