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    Bangladesh Liberalises LNG Market

Summary

The country is opening up the segment as it eyes a potential supply crunch.

by: M Azizur Rahman

Posted in:

Natural Gas & LNG News, Asia/Oceania, Liquified Natural Gas (LNG), Political, Ministries, Regulation, Supply/Demand, TSO, News By Country, Bangladesh

Bangladesh Liberalises LNG Market

Bangladesh has opened up the LNG segment to the private sector as the government eyes a supply crunch in the facing of mounting gas demand.

The ministry of power, energy and mineral resources has now adopted a policy allowing private entrepreneurs to import LNG, re-gasify it and sell the gas onwards. Under the "LNG Import Policy for Private Sector 2019" the government will not interfere in pricing.

State-owned Petrobangla is the monopoly LNG importer currently, have launched shipments in April 2018 with a delivery from Qatar. Around 600mn ft3/day of re-gasified LNG feeds into the national grid through two import terminals.

However, by 2041 Bangladesh will need to import around 30mn mt/yr of LNG to meet demand, according to forecasts by Copenhagen-based research firm Ramboll. The country's existing gas reserves of around 12tn ft3 are likely to run dry by 2038.

Permitted private sector companies will now be allowed to sell gas imported as LNG to fuel power plants and industrial units and for other commercial purposes. Operators of power plants and industry will also be able to arrange imports directly.

However, private traders will be limited in the amount of regasified LNG they can sell to Petrobangla. Sales of surplus gas cannot exceed 25% of a private trader’s total import volumes.

The policy also opens the way for the private sector to build LNG import infrastructure. Companies will have the opportunity to construct jetties, platforms, storage tanks, re-gasification plants and pipeline networks. Importers will also have access to Bangladesh’s gas network, which is operated by Petrobangla.

To receive an import permit, private operators must have experience in heavy industries or the power and energy sector. In case of a consortium, third parties must have a minimum of five years' experience in construction or maintaining of LNG projects.

Importers seeking a licence must provide necessary documents about potential buyers and planned volumes. No-objection certificates from the government will be required each year of operation.