The interim government has approved the import of an LNG cargo under the Public Procurement Act 2006 and the Public Procurement Rules 2008.
The import will be carried out from a Singapore-based company, following an approval given during a meeting of the Adviser’s Council Committee on Government Purchase on Wednesday.
The country sees such import for the first time since the suspension of a special law enacted during the tenure of the ousted Awami League government.
According to reports, the cargo will bring in 3.36 million MMBtu of LNG, with a total cost amounting to Tk 657.13 crore. Singapore-based Gunvor Singapore Private Limited will supply the LNG.
Sources revealed that to meet the growing demand for gas, two floating LNG terminals with capacities of 500 and 600 MMCF per day have been installed in Maheshkhali, Cox’s Bazar. Under long-term government-to-government agreements with Petrobangla, Bangladesh currently imports 2.5 MTPA of LNG from Qatar’s Ras Laffan Liquefied Gas Company Limited (Qatargas) and 1.0 MTPA from Oman Trading International (now known as OQ). In total, 3.5 MTPA of LNG is being imported, with additional purchases from the spot market to ensure uninterrupted gas supply to the power, industrial, and fertilizer sectors.
Previously, LNG purchases from the spot market were conducted under the “Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010.” This involved following a specific process of preparing a Master Sales and Purchase Agreement (MSPA), receiving vetting from the Legislative and Parliamentary Affairs Division, and obtaining approval from the Cabinet Committee on Economic Affairs. Petrobangla signed MSPAs with 23 companies and used the agreements to purchase LNG from the spot market since 2020.
However, on August 18, 2023, the Ministry of Power, Energy, and Mineral Resources issued a directive to suspend all ongoing negotiations, project selection, and procurement processes under the 2010 Act. Following this, the Procurement Advisory Committee recommended LNG imports from the spot market under the PPA-2006 and PPR-2008 in a meeting held on September 4, 2023.
As part of the plan to ensure a steady gas supply for the power, industrial, and fertilizer sectors, the ministry has approved the purchase of 16 LNG cargoes from the spot market for the period between September and December 2024. There was an initial plan to import five LNG cargoes in October, but due to insufficient quotations from suppliers, the procurement process was revised. Ultimately, a new request for quotations was issued, and three companies participated in the bidding for the 28th LNG cargo.
Gunvor Singapore Private Limited submitted the lowest bid, offering a price of $13.9300 per MMBtu. Two other bidders, Excelerate Energy LP (USA) and PetroChina International (Singapore) Private Limited, offered $14.1500 and $14.8500 per MMBtu, respectively. Based on the lowest bid, the total cost for the import of the LNG cargo, including VAT and taxes, will be Tk 657.13 crore.
The LNG is expected to be delivered between October 17 and 18, 2024.