A cabinet committee approves a proposal to buy 3.36 MMBtu LNG from TotalEnergies SE as the price falls in the open market
Published : 01 Feb 2023, 11:46 PM
The government has approved a proposal to buy liquified natural gas or LNG from the open market after an eight-month pause due to high prices and low dollar reserves.
The decision to buy LNG came at a cabinet committee meeting on Wednesday, two days after the International Monetary Fund approved $4.7 billion in loans, helping the country build a buffer against depleting forex reserves.
Additional Cabinet Secretary Sayeed Mahbub Khan confirmed the development to bdnews24.com, but could not give details.
A Petrobangla official said the government would buy 3.36 MMBtu LNG from TotalEnergies SE at around $20 per unit, and the consignment is expected to reach the country by the end of February.
Before pausing the import, the government bought a total of 30.24 MMBtu LNG in 2022, including the last consignment in May that cost the government around $25.75 per unit.
The halt on LNG purchases due to dwindling dollar reserves and high prices amid the Russia-Ukraine war forced the government to cut electricity production rapidly and ration supply by introducing rolling power outages.
As the lack of gas and power hit production, industries urged the government to resume LNG even if it had to raise gas prices.
The government in January raised gas prices by a maximum of 178 percent for industries and power plants with an aim to resuming LNG import.
Although the price hike was supposed to be effective from February, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said the government would start charging for gas at the new rates once new LNG is supplied to the industries and power plants.