Bangladesh to restart spot LNG buying as prices ease

2/1/2023

(Reuters) - Bangladesh aims to buy more LNG on the spot market in the coming months, two officials at its national gas company said, reversing a government decision last year to halt spot purchases after prices spiked.

Bangladesh's state-owned Rupantarita Prakritik Gas Company Ltd (RPGCL) last week sought one LNG cargo for delivery in late February.

While the tender has not yet been awarded, the lowest offer was made at $19.74 by TotalEnergies among four participants who competed, a source at RPGCL said. TotalEnergies did not immediately respond to a request for comment.

The South Asian nation relies on imported natural gas for nearly three-quarters of its power generation, but was forced to ration gas supplies last year as global prices were driven up by Russia's war in Ukraine.

"We are planning to buy 10 to 12 cargoes from the spot market until June. Prices are coming down, but they are still higher than the prices we are paying for the long-term deals," said a senior official at government-owned Petrobangla, which is in charge of LNG imports into Bangladesh.

He declined to be identified as he was not authorised to speak to the media. Bangladesh's energy ministry did not immediately respond to a request for comment.

"We are also trying to secure LNG from long-term partners, but it looks like they are unable to provide this year," the Petrobangla source said. "We are also exploring other sources."

Bangladesh halted spot purchases of LNG in July after prices of the super-chilled fuel spiked globally, with Asia spot LNG hitting record highs in August 2022 following Russia's move to curb gas supplies to Europe.

They have since eased, falling by a third since the start of the year on slower demand and high inventory levels in Europe and North Asia, leading emerging market buyers like Thailand and Bangladesh to seek tenders on the spot market once more.

Bangladesh currently imports about 300 MM-400 MM cubic feet of LNG daily through a 10-year import deal with Oman and a 15-year import deal with Qatar.

"The government is making frantic efforts to ensure gas supplies to keep the economy running," another Petrobangla official said.

(Reporting by Ruma Paul in Dhaka and Emily Chow in Singapore; Editing by Jan Harvey)