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Bangladesh scraps another LNG import tender over high prices

*The offer from Vitol to supply 138,000 cubic metres of LNG for Dec. 9-10 delivery was more than $2 per unit higher than the prices that Bangladesh pays under long-term contracts. * "From December, we will import two cargoes each month from the spot market," Rahman said, adding that both the tenders would be reissued.
Updated 23 Oct 2020

DHAKA: Bangladesh is cancelling another tender to import liquefied natural gas (LNG) in December, as it received one offer to supply the shipments that were too expensive, a senior energy ministry official said on Friday.

The offer from Vitol to supply 138,000 cubic metres of LNG for Dec. 9-10 delivery was more than $2 per unit higher than the prices that Bangladesh pays under long-term contracts, said Anisur Rahman, senior secretary to the Energy and Mineral Resources Division.

State-run Rupantarita Prakritik Gas Company, which is in charge of LNG imports into the country, earlier cancelled a tender for November delivery, citing the same reason.

Bangladesh, however, will go ahead with its plan to double its LNG imports from the spot market from December due to rising demand.

"From December, we will import two cargoes each month from the spot market," Rahman said, adding that both the tenders would be reissued.

Energy officials, however, doubted Bangladesh will get better prices for its tender, given the spot prices are surging on winter demand.

Under its long-term deals with Oman Trading International and Qatar gas, Bangladesh pays about $5.50 to $6 per million British thermal units (mmBtu).

Rupantarita bought Bangladesh's first spot LNG cargo ever from the Asian unit of Vitol at $3.8321 per mmBtu for delivery over late September to early October.

However, prices for spot cargoes, or shipments typically for December delivery, are gaining on robust buying appetite ahead of a colder-than-expected winter.

Spot LNG prices for Asia were estimated at $6.90 mmBtu on Friday, their highest in more than 20 months.

Bangladesh, with a population of about 160 million people, is set to become a major LNG importer in Asia as domestic gas supplies fall.

The country currently has two floating storage and regasification units with a total regasification capacity of 1 billion cubic feet per day, equal to about 7.5 million tonnes a year.