Bangladesh is set to buy 117 cargos of liquefied natural gas (LNG) from an American company over 13 years under government-to-government (G-to-G) arrangement, as the much-talked-about bilateral trade agreement works.
The Cabinet Committee on Government Purchase (CCGP) Wednesday approved a proposal on the gas buy under the long-term deal from Gunvor USA LLC, a Texas-based privately owned company.
Headed by Finance Minister Amir Khosru Mahmud Chowdhury, the purchase body, however, did not make it clear how G-to-G arrangement can be done with a private commercial enterprise.
Officials say the interim government, shortly before leaving office in February, signed with the United States a reciprocal trade agreement (RTA) under which Bangladesh pledged to lower trade deficit by raising imports from America.
The move to import 117 cargos of liquefied gas from a US-based supplier is part of that endeavour to lower trade deficit with the economic superpower.
Sources say the approval from the CCGP came despite the supplier, Gunvor USA LLC, has enhanced price of LNG from its initial proposal.
In its initial proposal, the company had said it wanted to supply LNG during 2026-28 period at JKM plus $0.10 per MMBTU and during the 2029-2038 period at 122 per cent of Henry Hub plus $5.35 per MMBTU.
However, while negotiating with Petrobangla, the exporter pushed the price for 2026-28 to JKM plus $0.875 per MMBTU while for 2029-38 period the price was fixed 121 per cent plus $5.20 per MMBTU.
Due to re-fixation of the price, the CCGP had suspended the initiative for approving the LNG procurement in the first week of this month. However, the proposal was given the go-ahead on Wednesday with the negotiated high price.
Of the 117 cargos of LNG, five cargos will be bought in the current year, six in 2027, and three in 2028 at a price of JKM plus US$0.0875/MMBTU. Moreover, three more cargos in 2029, and 10 cargos each every year during 2029-2038 will be bought in at a price of 121 per cent of Henry Hub plus 5.20 USD/MMBTU.
The meeting, held at the cabinet division in the Bangladesh secretariat with the finance minister in the chair, also approved procurement of six more cargos of LNG to meet the growing demand for gas.
Of the six cargos of LNG, United Kingdom-based Blackcube International Ltd will supply two cargos at $15.50 per MMBTU while Maxewell International SPC, Oman, will supply two cargos at JKM+US$054/MMBTU, and Zhenyu Shipping Co Ltd, Hong Kong, will supply two cargos at $14.95/MMBTU.
Moreover, the meeting also approved the import of 40,000 tonnes of bulk granular urea fertiliser from SABIC Agri-nutrients Company in Saudi Arabia at a total cost of Tk 2.09 billion where each tonne will cost $421.67.
Also, procurement of 40,000 tonnes of DAP fertiliser for Bangladesh Agriculture Development Corporation (BADC) got approval. The total procurement from OCP Nutricrops, S.A, will cost Tk 4.41 billion while each tonne of fertiliser will cost $891.67.
Moreover, the BADC has been given the all-clear to procure 30,000 tonnes of TSP fertiliser from OCP Nutricrops, S.A, at a total price of Tk 2.51 billion where each tonne will cost $677.33.
A proposal to import 0.1 million tonnes of non-aromatic parboiled rice for the Directorate of Food also got approval at the meeting. Vietnam Southern Food Corporation will supply the rice at a total cost of Tk 5.15 billion, with each tonne costing $416.
The meeting also approved the import of 25,000 tonnes of sugar from Indonesia at a total cost of Tk 1.57 billion where each tonne costs $514.
A proposal to import 20,000 tonnes of refined soybean oil from PT Trinity Cahya Energy, Indonesia, also got approval at the cabinet meeting. The total procurement will cost Tk 2.82 billion while each litre will cost $1.150.
Moreover, procurement of 10,000 tonnes of lentils from Rajshahi-based Nabil Naba Foods Ltd at a total price of Tk 789 million got approval at the meeting, where each kg of the item will cost Tk 78.96.
Earlier in the day, the Cabinet Committee on Economic Affairs in a meeting, also chaired by the finance minister, approved in principle, procurement of two cargos of LNG each from Hong Kong-based Zhenyu Shipping Co Ltd, Petronas LNG Ltd, Malaysia, China Runze Holdings Groups Ltd, and DARAB Inc, USA.
Source: https://thefinancialexpress.com.bd/economy/govt-finally-goes-for-us-lng-at-jacked-up-price
