[Premium] Bangladesh Lines Up Oman as LNG Supplier

Oman is lining up to supply LNG to the emerging Bangladesh market having signed early September a memorandum of understanding (MOU), the managing director of state-run Rupantarita Prakritik Gas Company (RPGCL) Md Quamruzzaman told NGW September 11.

State-run Petrobangla will open talks with Oman LNG soon in order to fix up the volume, price and specification of the LNG to be imported, he said. Bangladesh wants lean LNG – similar to Bangladesh's domestic fields – from Oman, which will be blended with domestic gas before delivery to end-users.

This is Bangladesh's third LNG supply agreement, as the country is faced with declining natural gas reserves and mounting demand from the downstream power and fertiliser sectors. It signed an initial agreement with Qatar's RasGas for 2.5mn mt/year of lean LNG for 15 years.

Bangladesh's Cabinet Committee on Public Purchase has approved the initial deal on August 30 and a final deal is expected to be inked in September, said a senior Petrobangla official. Petrobangla and Switzerland-based AOT Energy have signed a MOU June 13 over LNG supplies to Bangladesh. 

Bangladesh did not elaborate on the quality of LNG to be imported from these companies but said it would be similar to the specifications set for spot LNG.

Under the specifications, the imported LNG should have a gross heating value within the range of 1,025-1,100 Btu/ft³, RPGCL managing director said previously, adding it could be problematic for exporters of lean LNG from Australia's Queensland or rich LNG from the Middle East.

Since the imported LNG is to be blended with sulphur-free, sweet gas produced domestically, the sulphur content in the imported LNG must be low. RPGCL has received expressions of interest from 39 global firms to supply LNG on a spot basis in its tender which closed August 17 and a dozen companies will be short-listed this month, said a senior RPGCL official.

Bangladesh's first LNG import terminal, a 3.75mn mt/year floating storage and regasification unit that is being developed by US-based Excelerate Energy, is expected to be commissioned in April 2018 and its second, also with a capacity of 3.75mn mt/year, which is being developed by Summit Group, is expected to be commissioned by end-2018.

Both FSRUs will be at Moheshkhali Island in the Bay of Bengal, and ownership of the vessels will be transferred to Petrobangla after 15 years of operations. Petrobangla is also planning to set up at least two onshore LNG terminals, each with a capacity of 7.5mn mt/year, by 2025.

Bangladesh's output is around 2.70bn ft³/d – the peak level stated in the report – while demand is close to 3.30bn ft³/d.

M Azizur Rahman

 


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