Three more LNG cargoes to be bought at double Dec prices

Bangladesh will purchase three more cargoes of liquefied natural gas (LNG) on the spot market from South Korean and UK-based companies at more than double the price paid in December, as the government moves to prevent a looming energy crisis.

The cabinet committee on public purchase approved the deal yesterday. The three shipments are expected to arrive between April 5 and April 13.

UK-based TotalEnergies Gas & Power Ltd will supply one cargo at $21.58 per MMBtu (Million Metric British Thermal Units), while South Korea-based Posco International Corporation will provide two cargoes at $20.76 per MMBtu.

The government will spend around Tk 2,660 crore on these deliveries, adding pressure on the fiscal budget.

Earlier, state-run Petrobangla secured two emergency LNG cargoes for March deliveries from the spot market at nearly three times December prices due to supply uncertainties caused by rising geopolitical tensions in the Middle East.

One cargo was purchased from US-based Gunvor at $28.28 per MMBtu, a 183 percent increase over December rates, while a second shipment from Vitol cost $23.08 per MMBtu, according to Petrobangla officials.

Previously, the government had approved LNG purchases at $9.99 per MMBtu in December and $11.97 per MMBtu in July, highlighting how sharply spot-market prices have risen. This situation highlights how vulnerable South Asian markets are to global price swings when shipping routes face disruption.

“We had to pay a steep premium because suppliers were increasingly reluctant to submit bids,” a Petrobangla official said on condition of anonymity. “The ongoing Middle East crisis has reduced the number of participants willing to make short-term deliveries to this region.”

LNG prices, which had been gradually falling, spiked last week due to the US-Israel war on Iran. Bangladesh had to turn to the spot market after failing to attract bidders for two consecutive days, even at more than double the usual rate.

This comes amid ongoing uncertainty over timely shipments from Qatar, as Gulf shipping remains heavily disrupted. Tehran has threatened to “set fire” to vessels in the Strait of Hormuz, a key oil chokepoint connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea.

Bangladesh meets nearly 30 percent of its gas demand through imported LNG, while domestic output continues to fall short of the total requirement of about 2,650 mmcfd (million cubic feet per day).

The country also spends around $1 billion annually to import over 6 million tonnes of petroleum, mostly sourced from the Middle East, with more than half of LNG imports in 2025 passing through the Strait of Hormuz.

In other approvals, the government yesterday cleared the purchase of 3.10 lakh litres of rice bran oil and palm oil. Indonesian bidder Powerhouse General Trading will supply 1.30 lakh litres of palm oil, while local suppliers will provide rice bran oil.

Additionally, the cabinet committee on public purchase approved the buying of 240 megawatts of electricity from a gas-based power plant of the Electricity Generation Company of Bangladesh at a cost of Tk 23,880 crore, with a tariff rate of Tk 3.3664 per kilowatt-hour.