Earlier this week, the government cancelled another tender to import LNG in November for the same reason
Just a couple of days after canceling a tender for importing liquefied natural gas (LNG) in November over highly expensive offers, the government now has binned the LNG import tender for December from the spot market for the same reason.
Confirming the news, Md Anisur Rahman, senior secretary to the Energy and Mineral Resources Division, on Thursday told The Business Standard that the tender was cancelled as the price proposed by the suppliers were much higher compared to what the country pays under the long-term contracts it already has.
"We have received only one bidder whose proposed price for per million British thermal units (MMBTu) LNG was $2.03 higher than the long-term contract price. Therefore, we've cancelled it and decided to re-tender," he said.
Currently, Bangladesh is importing LNG at prices ranging from around $5.50-6 per MMBTu under its long-term contracts with Oman Trading International and Qatar Gas.
After a long debate centring LNG import costs under the long-term contracts, the Energy Division decided to import LNG from the open market or spot market this year, in a bid to take advantage of the slump in oil and natural gas prices globally.
On 15 September this year, the country imported its first-ever shipment of LNG from the spot market. The Vitol Asia Pte Ltd delivered the LNG cargo after offering the best bid at $3.8321 per million British thermal units (MMBTu).
For December, the state-run Rupantarita Prakritik Gas Company – which is in charge of LNG imports in Bangladesh – planned to import two cargoes of LNG from the spot market.
However, only the Asian unit of Vitol submitted a proposal to supply LNG offering the price rate at $ 7.53-8.03 per MMBTu.
Bangladesh imported 3.89 million tonnes of LNG in 2019 under its long-term contracts with Oman Trading International and Qatar gas.
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.