Bangladesh to buy LNG at double the price from two months ago amid global supply squeeze

The government plans to buy liquefied natural gas at $13.42 per unit, which is double the price from two months ago, as Asian spot prices jumped.

Published : 26 June 2021, 02:18 PM
Updated : 26 June 2021, 02:18 PM

The cabinet committee on government purchase approved the procurement of 3.36 million MMBtu (Metric Million British Thermal Unit) of LNG from US company Excelerate Energy on Saturday.

This shipment of LNG will cost the government a total of about Tk 4.48 billion, Additional Cabinet Secretary Shamsul Arefin said.

In early April, Bangladesh bought the same amount of LNG from Switzerland’s AOT Trading at over Tk 2.43 billion.

The price of the latest batch is the highest for Bangladesh after it began importing LNG, said Energy Secretary Md Anisur Rahman.

“Fuel oil price is at the highest level in the international market. Crude price has shot up over $75 per barrel from below $70 in the beginning of this month,” he said.

The government is “very concerned” about the rising oil price that is forecast to hit $110 per barrel as the producers have cut production with an aim to raise the price, according to him.    

Supply issues, both planned and unplanned, plague some plants in the United States, Australia, Malaysia and Indonesia, and are supporting prices, Reuters reports citing traders.

Demand for LNG remained robust globally.

China's offshore oil and gas major CNOOC Ltd bought more than 10 cargoes for delivery between July and next March as demand in southern China was strong due to hot weather.

South Korea's newest and biggest nuclear reactor, Shin Kori-4, shut last month after a fire, is also expected to boost LNG demand.

In India, gas consumption is seen recovering in June after declining in the previous two months, as states ease restrictions, officials said, though the monsoon season may limit LNG imports.

The cabinet committee also approved new rules to import wheat, stipulating that the suppliers submit tender within 15 days instead of 48 from the publication of a notice.

The initial goal of the changes is to purchase 500,000 tonnes of wheat from Russia quickly, including 200,000 tonnes from the government and the rest from private suppliers.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher