Bangladesh Ends Spot LNG Imports

Copyright © 2021 Energy Intelligence Group

Bangladesh has decided not to buy any more spot LNG cargoes due to high prices, an executive at state-owned Petrobangla, who did not wish to be named, told Energy Intelligence. Gas demand from the power sector is easing anyway, the executive said. Northeast Asian spot LNG prices have been rising for months (LNGI Aug.31'21). Bangladesh last bought a spot cargo on Aug 2 at $13 per million Btu. Prices are now hovering around $18/MMBtu, much beyond Bangladesh's comfortable level of $10/MMBtu, the executive said (LNGI May4'21). Bangladesh currently has two LNG import terminals, both floating units in the Bay of Bengal, with 3.8 million tons per year import capacity each. It is also planing a 7.5 million ton/yr land-based LNG terminal. The government intends to be able to import 35 million tons/yr by 2030. South Asian Sensitivity The South Asian LNG buyers -- India, Pakistan, Bangladesh -- are all price-sensitive markets as users, like the power sector, cannot fully pass on supply costs. The recent surge in prices has tested buyers resolve to base their LNG imports on spot shipments. Pakistan has been forced to cancel and reissue LNG tenders with an eye on getting better offers (LNGI Aug.24'21). Indian buyers too have curtailed spot buying and are seeking term deals (LNGI Aug.16'21). The surge in spot prices means Bangladesh will reduce consumption of LNG, switch to liquid fuels, and/or turn more toward term deals. Turn to Term Bangladesh will likely buy six cargoes per month, all under term deals, for remaining part of the year, compared with seven-eight cargoes that it was getting until recently, the executive said. But that is unlikely to have any major impact on power generation and will not warrant rationing. Demand for power is easing as summer temperatures cool off and as crop sowing season is over, the executive said. Power demand during sowing season is for irrigation (LNGI Jul.12'21). The country's two operating terminals are mainly fed by Petrobangla’s two long-term sale and purchase agreements -- a 2.5 million ton/yr deal with Qatar and 1 million tons with Oman Trading International. Bangladesh is now eyeing another term deal of around 2.5 million tons in order to reduce its exposure to volatile spot markets and assure supplies at affordable prices, the executive said. Several suppliers have approached the government to supply LNG on a term basis, he added (LNGI Aug.2'21). Rakesh Sharma, New Delhi

Gazprom sees bright long-term prospects for an increase in pipeline gas exports to China.
Fri, Sep 17, 2021
Most Read
Production of hydrocarbon liquids outside the Opec-plus alliance will peak in 2025, our medium-term outlook shows, the inevitable result of lower investments upstream.
Thu, Sep 16, 2021