LNG to come from Oman too
12:00 AM, April 19, 2018 / LAST MODIFIED: 03:11 AM, April 19, 2018

LNG to come from Oman too

As part of its efforts to address gas crisis in the country, the government is going to import liquefied natural gas (LNG) from Oman.

Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) will sign a 10-year contract with Oman Trading International (OTI) for bringing the gas under a government-to-government arrangement.

The cabinet committee on purchase yesterday approved the draft contract, which says the LNG would be supplied at 11.9 percent of the three-month average price of Brent oil plus $0.4 constant per MMBTU (1 million British thermal units).

For the first six years, OTI would supply 1.8 million tonnes of LNG each year and it would go up to 2.5 million tonnes for the following four years, according to the draft contract.

In September last year, the government signed a 15-year contract with Qatar's RasGas, which would supply 2.5 million tonnes of LNG every year.

In case of Qatar, the LNG pricing formula is: 12.65 percent of the three-month average price of Brent oil plus $0.5 constant MMBTU.

In Bangladesh, gas production cost, without the supplementary duties and other changes, stands at Tk 4.3 per cubic metre. It becomes Tk 9.55 including all the charges.

The price would be Tk 14.64 per unit when LNG and local gas would be blended, said an official, citing energy ministry calculations.

The average retail price of gas supplied by Petrobangla from domestic sources is Tk 7.39 per cubic metre. But when LNG is mixed with local gas, the price may be set at about Tk 13.

An energy ministry official said the first ship carrying about 500 million cubic feet per day (mmcfd) gas would arrive in Cox's Bazar's Maheshkhali from Qatar by April 24.

The gas is likely to be added to the national grid.

The LNG from Oman would be added to the grid through floating terminals.

The government has signed agreements with US-based Excelerate Energy and local Summit Group for setting up floating terminals.

Excelerate has already prepared the terminal while Summit Group would complete its by October, according to a Petrobangla official.

Bangladesh is importing gas to alleviate its energy shortage, largely caused by the depletion of domestic reserves and rising demand.

At present, the country's gas supply stands at about 2,750 mmcfd against the demand for 3,600 mmcfd. The shortage of gas has affected power generation as well as industries and households.

The government has already said gas prices will go up further after LNG would be added to the line.

Six state-run gas distribution companies have sent proposals for increasing gas price for industrial usage.

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