Govt to purchase LNG from US company for 15 years

The Bangladesh Oil, Gas, and Mineral Corporation (Petrobangla) is set to enter into a 15-year contract with the US-based company Excelerate Gas Marketing Ltd Partnership to purchase liquefied natural gas (LNG).

The Cabinet Committee on Public Purchase approved a contract proposal in this regard submitted by the Energy and Mineral Resources Division on Wednesday (25 October).

Currently, the government is procuring LNG from the same company through the spot market.

During the meeting of the committee chaired by Finance Minister AHM Mustafa Kamal, 24 other proposals, in addition to this one, received approval. Syed Mahbub Khan, additional secretary of the Cabinet Division, disclosed the information to the media after the meeting.

According to sources, Excelerate Gas Marketing Ltd Partnership will supply Bangladesh with 0.85 million tonnes per annum (MTPA) of LNG in 2026 and 2027, and 1 MTPA of LNG from 2028 to 2040. The price per million British thermal units (MMBtu) of LNG will be $0.30 plus 13.35% of the Brent price on the delivery date. For example, if the price of Brent delivered in January 2026 is $100, Bangladesh will pay the company $13.65 per MMBtu of LNG.

Petrobangla currently uses Excelerate Energy Bangladesh Ltd's LNG terminal at Maheshkhali in Cox's Bazar to import liquefied LNG from different countries, including Qatar and Kuwait. The terminal converts the LNG into gas, which is then supplied to the natural gas transmission grid.

Excelerate Energy Bangladesh's daily capacity to transform liquid to gas has recently been increased from 500 million cubic feet (MMcfd) to 600 MMcfd, and the cabinet has approved an amendment to Petrobangla's contract to use this additional capacity.

In addition, the Cabinet Committee on Government Purchase has approved the import of one cargo (33.60 lakh MMBTU) of LNG from Vitol Asia Pte Ltd, Singapore, at a cost of $17.55 per MMBTU from the spot market, for a total cost of Tk762 crore. This is the 23rd LNG purchase offer from the spot market this year.

The Cabinet Committee on Economic Affairs has also approved the purchase of 15 lakh tonnes of crude oil from Saudi ARAMCO and Abu Dhabi's ADNOC through the direct purchase method for 2024 by the Bangladesh Petroleum Corporation (BPC).

In the meeting, the Bangladesh Power Development Board has been approved to install two solar power plants in Jamalpur and Munshiganj, with a capacity of 180MW and 130MW, respectively. The plants will supply electricity to the government for 20 years at a rate of Tk11 per kilowatt hour.

In addition, the concerned ministries approved the purchase of books for secondary and higher secondary levels in 2024, 1.15 lakh tonnes of various types of fertilisers, 6,000 tonnes of lentils, 40 lakh litres of rice bran oil, and 80 lakh litres of soybean oil.