Govt bringing another LNG shipment from spot market

The government is going to bring another shipment of liquefied natural gas (LNG) from the international spot market, the fifth since February, at a cheaper rate to boost electricity production ahead of the Boro and summer season. 

The cabinet committee on purchase in a meeting yesterday approved the procurement of 33.60 lakh MMBtu of LNG from Excelerate Energy LP of the US for Tk 578.65 crore.

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This time the price of the super-chilled fuel was $13.69 per MMBtu.

It was $14.66 on March 10 when Bangladesh bought the same amount of fuel from Switzerland-based TotalEnergies Gas & Power. In the first week of March the country bought the fuel from Singapore-based Vitol Asia at $16.10.

The LNG prices in the global market were driven up by the Russia-Ukraine war last year and it reached at a record $70 per MMBtu in August.

The higher prices forced Bangladesh to pause the purchase of LNG from the international spot market to save its foreign currency reserves.

Since the beginning of 2023, the LNG prices plunged by more than 70 per cent from August's record on slower demand and high inventory levels in Europe and North Asia.

With the summer and irrigation season coming up, Bangladesh ramped up its participation in the international spot market for LNG, issuing tenders regularly from the first week of February after seven months of pause.

When Bangladesh halted spot LNG purchases in June, it had paid $24.25 per MMBtu.

If the price stays at less than $20 per MMBtu, Bangladesh is likely to end up purchasing 10 to 12 shipments between February and June.

Meanwhile, the committee approved a proposal of the Trading Corporation of Bangladesh (TCB) to purchase 8,000 tonnes of lentil at Tk 91.14 per kilogramme from Indian firm UMA Expo Pvt. Ltd.

The purchase of 30,000 tonnes of granular urea fertiliser from Karnaphuli Fertilizer Company Limited for Tk 105.43 crore was also approved at the meeting.

Each tonne of the fertiliser will cost $327.62 whereas the rate during a previous purchase from the same company was $330.62.

The committee also approved the purchase of 40,000 tonnes of diammonium phosphate fertiliser from Morocco-based OCP, SA.

The cost of the fertiliser this time will be $610 per tonne whereas the rate during a previous purchase from the same company was $710.