Govt okays import of LNG cargo from Singaporean firm to meet gas demand

The government will import a cargo of liquefied natural gas (LNG), having 33.66 lakh MMBtu, from the Vitol Asia Pte Ltd of Singapore at a cost of Tk429.40 crore to meet the growing gas demand in the country.

Cabinet Committee on Government Purchase (CCGP) in a meeting, with Finance Minister Abul Hassan Mahmood Ali in the chair, approved a proposal of state-owned Petrobangla in this regard.

As per the proposal, placed by the Energy and Mineral Resources on behalf of the Petrobangla, each unit of the LNG will cost $9.93, a price lowest in last two years.

After the meeting, Additional Secretary of the Cabinet Division Syed Mahmud Khan informed the reporters that the supplier was selected from the limited listed companies through a bidding in the international spot market under Master Sale and Purchase Agreement (MSPA).

The Rapid Increase in Supply of Electricity and Energy (Special Provisions) Act 2010 (Amendment 2021) was followed in this regard, he said.

Sources in the Energy and Mineral Resources Ministry said Bangladesh has planned to import a total of 13 LNG cargoes from January to June this year.

This is the second cargo as the first one was approved in last week's meeting on 22 January under which Switzerland-based company 'TotalEnergies Gas and Power Limited' will supply a cargo having the same volume 33.66 lakh MMBtu with each unit price  $10.88.

Earlier, the government signed 'Master Sale and Purchase' Agreement (MSPA) with 22 shortlisted companies  to import LNG from the international spot market.

Imports of LNG from the spot market were suspended from July 2022 to January 2023 as the price of LNG from the spot market increased many times while the government was facing dollar crisis.

Currently, the country has been experiencing a severe gas crisis as production came down to nearly 2500 million cubic feet per day (mmcfd) while the demand is about 4000 mmcfd.

As a result, household consumers in many areas are not getting gas for cooking while power and industrial productions are being seriously disrupted due to gas shortage. 

In the meantime, the government increased the gas price for both captive power and public sector power generation on 18 January.

Through an order, the price of gas used for power generation was set at Tk14 per cubic metre, while the price of gas to be used in captive power and industry was set at Tk30 per cubic metre.

Meanwhile, the CCGP approved two separate proposals to import a total of 60,000 tonnes of urea fertiliser from Qatar and Saudi Arabia at a cost of Tk223.84 crore under the state contracts.