Bangladesh to buy four more LNG cargoes at higher prices amid energy crisis

Bangladesh is paying sharply higher prices for fresh LNG supplies as it scrambles to ease a gas shortage that has disrupted industries and power generation.

The government on Tuesday approved the purchase of four more liquefied natural gas cargoes from the spot market, with the highest-priced shipment costing $28.03 per million British thermal units, or MMBtu.

That is as much as $4.10 per MMBtu above the price approved for another cargo just 15 days earlier.

The decision came at a meeting of the Cabinet Committee on Government Purchase amid the continuing energy crunch.

On Aug 24, the government approved two LNG cargoes at $24.62 and $24.25 per MMBtu.

Of the four newly approved shipments, one from BP Singapore Pte will cost $28.03 per MMBtu.

A cargo from Aramco Trading Singapore has been priced at $27.54 per MMBtu, while another from Vitol Asia will cost $26.67.

A second cargo from Aramco Trading Singapore, however, will come at a lower price of $23.98 per MMBtu.

Five days before the Aug 24 decision, the government had approved another LNG cargo at $23.93 per MMBtu.

That means the highest spot-market purchase price has risen by as much as $4.10 per MMBtu in only 15 days.

Since the BNP government took office, Bangladesh has continued buying LNG from the spot market at higher prices amid the war in West Asia.

For much of that period, the cost of each cargo hovered around Tk 7 billion.

By July, however, the bill had climbed above Tk 9.43 billion.

At a government purchase committee meeting on Jul 30, an LNG cargo was approved at a cost of Tk 9.43 billion.

Within 26 days, the price of a single cargo had risen by roughly another Tk 700 million.

The higher prices come as Bangladesh faces reduced gas supplies following problems at one of its LNG terminals.

A fire on Jul 21 damaged electrical cables at the Excelerate terminal, cutting off around 450 million cubic feet of gas supply a day.

The terminal partially resumed operations on Aug 6, more than two weeks later.

But supplies have fluctuated several times since then because of technical problems and shortages of LNG cargoes.