[Premium} Bangladesh Inks Oman LNG Deal

The government of Bangladesh May 6 inked its second binding LNG purchase agreement (SPA), for 1.0mn metric tons/year of LNG from Oman Trading International (OTI) for 10 years, Petrobangla chairman Abul Mansur Md Faizullah told NGW May 7. The contract is for delivery ex-ship and the terms were agreed April 19. 

The South Asian country earlier inked its first binding SPA with Qatar's RasGas on September 25, 2017 to buy 2.5mn mt/yr of lean LNG over 15 years.

Under the OTI SPA, deliveries will be split equally between two terminals, one owned by US-based Excelerate; and the other by local Summit Group. The purchase price has been set at around 11.90% of the three-month average Brent crude prices plus 40 cents/mn Btu, he said. Petrobangla has the option to import an additional 0.5mn mt/year of LNG, if required.

The base volume of LNG to be imported from OTI by Petrobangla is 900,000 mt/yr, with take or pay below that. Payment is due within 25 days of each delivery.

The government planned to start commercial supplies of regasified LNG by the end of this month, following the arrival April 24 of Excelerate's floating storage and regasification unit Excellence, carrying 136,000 m³ of lean LNG from RasGas, the managing director of state-run Rupantorita Praktritik Gas (RPGCL) Md Quamruzzaman said. RPGCL is in charge of monitoring LNG imports and the facilities in Bangladesh, and he said the department was busy linking the pipelines to the tankers. 

Bangladesh is talking to other suppliers and planning to sign more binding long-term SPAs. The country is also in talks with spot suppliers as it will need to import around 30mn mt/year by 2041 as domestic gas reserves are depleting fast, according to a report prepared by Copenhagen-based research firm Ramboll in association with Geological Survey of Denmark and EQMS Consulting.