Bangladesh calls on Qatar again to lower LNG import price
05, 2020, 19:17:06
07 October 2020 13:27:26
Bangladesh has again called on Qatar to reconsider a downward adjustment in the import price of LNG, or liquefied natural gas, from Qatargas in the context of the global coronavirus pandemic.
Minister of State for Energy, Energy and Mineral Resources Ministry Nasrul Hamid made the request in a virtual meeting with Qatar Minister of State for Energy Affairs Saad Sherida Al-Kaabi, Monday.
Mr. Hamid had submitted a similar request to Mr. Kaabi to reconsider the import price of LNG from Qatar in October last year when Mr. Kaabi allegedly ensured to reconsider the price of LNG when the protocol was extended. agreement existing between the two countries.
But to date, Bangladesh has yet to receive a positive response from the Middle Eastern LNG giant.
Last year’s call for the lower LNG price was made at a meeting when an eight-member Qatari delegation led by Kaabi came to the secretariat.
It is also not clear whether Qatar will respond positively this time to Bangladesh’s call for lower LNG prices given the global spread of the coronavirus and the subsequent drop in oil and natural gas prices, including that of LNG.
Currently, state-owned Petrobangla imports lean LNG from Qatargas at around US $ 6.0 per mmBtu (million UK thermal units).
But it imported lean LNG from the spot market a few weeks ago at $ 3.83 per mmBtu.
During the online meeting on Monday, the Qatari minister reportedly wanted more bilateral companies in various fields, including LNG.
A joint venture of Qatar Petroleum LNG Services and the American ExxonMobil is among the 11 other global bidders interested in the construction of a land import terminal of LNG with a capacity of 1,000 million cubic feet per day (mmcfd) in Matarbari at Cox’s Bazar.
The Ministry of Energy has not yet shortlisted the bidders for the construction of the land-based LNG import terminal.
Qatar also has an interest in investing in the country’s LNG-based power sector, sources said.
Currently, Petrobangla has been importing LNG from Qatar under an agreement to purchase approximately 2.5 million tonnes per year, or Mtpa, of lean LNG for more than 15 years from RasGas of Qatar, which merged with Qatargas in 2018.
In the first five years of the agreement, Qatargas will supply around 1.8 million tonnes of LNG each year, which will increase to 2.5 Mtpa over the next 10 years.
The purchase price was set at approximately 12.65% of the three-month average Brent crude oil price plus constant $ 0.50 per mmBtu.
If Petrobangla will have more demand in the first five years, this could increase the import volume of LNG each year to 2.5 Mtpa; and over the next 10 years, Petrobangla has the opportunity to reduce the amount by 10 percent each year.
If Bangladesh takes less than the baseline amount of LNG in a year, it will have to pay the price on a bought-in basis, as per the agreement.
Several countries around the world, including India and Pakistan, however, reduced their import costs for LNG from Qatar in 2015 following renegotiations.