Govt to make another LNG purchase from spot market

The government is going to buy another shipment of liquefied natural gas (LNG) from the international spot market, the sixth since February. 

The cabinet committee on purchase in a meeting yesterday approved the procurement of 33.60 lakh MMBtu of LNG from TotalEnergies Gas and Power Limited of the Switzerland at Tk 624.40 crore.

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This time the price of the super-chilled fuel was $14.84 per MMBtu, which was $13.69 per MMBtu for the last shipment purchased in March 23.

It was $14.66 on March 10 when Bangladesh bought the same amount of fuel from the same company, TotalEnergies. 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.

Tanker trucks carrying liquefied natural gas (LNG) cross the Xihoumen bridge of Zhoushan, Zhejiang province, in China. The LNG prices in the global market were driven up by the Russia-Ukraine war last year and it reached a record of $70 per MMBtu in August. The higher prices had forced Bangladesh to pause the purchase of LNG from the international spot market to save its foreign currency reserves. Photo: Reuters/file

During Ramadan, the government is working to supply around 2,900mmcfd (million cubic feet a day) of gas, where the LNG portion is around 25 per cent (around 750 mmcfd).

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 a seven-month pause.

Recently Petrobangla Chairman Zanendra Nath Sarker also hinted that they would increase purchase of the LNG.

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 has also approved the import of di-ammonium phosphate (DAP) fertiliser under a government-to-government agreement with Saudi Arabia's state-owned mining company MA'ADEN.

Bangladesh Agriculture Development Corporation will import 40,000 tonnes of the DAP fertiliser at a cost of Tk 257.94 crore.