The government has approved the purchase of another shipment of liquefied natural gas (LNG) from the international spot market, the fourth since February, to ramp up electricity production ahead of Ramadan and the summer season.
The cabinet committee on purchase, during a meeting yesterday, approved the procurement of 33.60 lakh MMBtu of LNG from TotalEnergies Gas & Power of Switzerland for Tk 618.21 crore.
This time the price of the super-chilled fuel was $14.66 per MMBtu.
It was $16.10 last week when Bangladesh bought the same amount of fuel from Singapore-based Vitol Asia.
The country depends on imported LNG for about 25 per cent of its gas demand. It was forced to ration gas supplies last year as global prices were driven up by the Russia-Ukraine war.
The higher prices also forced Bangladesh to pause the purchase of LNG from the international spot market to save its foreign currency reserves.
Since the start of 2023, LNG prices plunged by more than 70 per cent from August’s record $70 per MMBtu on slower demand and high inventory levels in Europe and North Asia.
With the summer and irrigation season coming up, Bangladesh ramped up its participation in the international spot market for LNG, issuing tenders regularly from the first week of February after seven months.
If the price stays at less than $20 per MMBtu, Bangladesh is likely to end up purchasing 10 to 12 shipments between February and June.
When Bangladesh halted spot LNG purchases in June, it had paid $24.25 per MMBtu.
Asian spot LNG prices slipped to $19.50 per MMBtu in the week to February 3, the first time it has fallen below $20 since September 2021, as inventories remain high with peak winter demand due to end soon.
European sanctions on Russia that pushed up LNG prices are discriminatory in nature for countries like Bangladesh, which are unable to secure LNG supplies due to high prices.
The development means the industries, which have been running on a truncated production schedule for want of gas, can expect uninterrupted supply once again.
To enable spot purchases, the government in January hiked the retail price of gas by 14.5 per cent to 178.9 per cent for industries, power plants and commercial establishments, who together account for 78 per cent of the gas used in Bangladesh.
The purchase of 30,000 tonnes of granular urea fertiliser from Karnaphuli Fertilizer Company for Tk 105.62 crore was also approved at the meeting of the cabinet committee.
Moreover, SABIC Agri-Nutrients Company of Saudi Arabia will supply another 30,000 tonnes for Tk 107.28 crore.
The government gave its nod to the construction of a general cargo terminal with allied infrastructure at Pangaon in Dhaka by Toma Construction & Company for Tk 163.51 crore. The company will also upgrade a Chandpur passenger terminal for Tk 93.43 crore.
The committee also approved a Tk 210 crore project for the construction of a general cargo terminal with allied infrastructure in Ashuganj through a joint venture of National Development Engineers and SS Raman International of Bangladesh and Daeyang Korea.
The same joint venture will upgrade a Barishal passenger terminal for Tk 93.30 crore.