The government will buy one liquefied natural gas (LNG) cargo from spot market in September despite acute fund crunch to clear outstanding overdue payments to suppliers.
The state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) has floated a tender to purchase one spot LNG cargo for Sept 11-12 delivery to the Moheshkhali floating storage and re-gasification unit (FSRU), a senior RPGCL official told the FE on Tuesday.
The deadline for submitting bids by a selective pool of spot LNG suppliers is July 30, having the validity until August 03, he added.
The RPGCL, a wholly-owned subsidiary of the Petrobangla, floated the tender to buy the spot LNG cargo amid US dollar crunch, which prompted France’s TotalEnergies and Gunvor Singapore to issue warnings to the Petrobangla earlier in July to clear about US$ 113 million in outstanding payments for spot LNG cargoes or forfeit monetary guarantees with the state bank.
TotalEnergies and Gunvor Singapore sought full clearance of pending invoices within three working days in the week ending on July 14.
Otherwise, they would be forced to adjust the dues from guarantees under the standby letter of credit (SBLC), kept by the Petrobangla with the state-run Agrani Bank Ltd against LNG trading with the suppliers, the officials said.
The Ministry of Power, Energy and Mineral Resources intervened in the matter following the Petrobangla’s requests, and some money was paid to the spot LNG suppliers, they noted without mentioning the amount.
The Petrobangla sources said it could come out of the payment crisis soon, as the entity is now in talks to borrow around $500 million from the Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group, to clear the pending dues with the international oil companies (IOCs), including the LNG suppliers.
The country previously awarded two spot LNG cargo tenders for Aug 7-8 delivery and Aug 25-26 deliveries to Moheshkhali FSRUs – to Excelerate Energy and Vitol Asia at $13.45 per million British thermal unit (MMBTu) and $12.70 per MMBTu respectively. They were the lone bidders for each of the spot LNG cargoes.
The RPGCL’s seeking of spot LNG cargo for August 7-8 was a re-tender, as it had got a price quote at around $15 per MMBTu in its previous bid, which was deemed high by Bangladesh’s tender evaluation committee and was subsequently cancelled.
The country previously did not get any offer against the tender to purchase one spot LNG cargo for July 10-11 delivery, which was re-tendered too, and the cargo was awarded to Gunvor Singapore Pte Ltd for July 12-13 delivery.
The Petrobangla has a plan to import three more spot LNG cargoes until December, said the officials without mentioning the dates of future spot tenders.
Separately, the Petrobangla will import a total of five LNG cargoes in September – three from Qatargas and two from OQ Trading, previously known as Oman Trading International, similar to that of August’s LNG cargo import from term suppliers, the sources added.
The country has already imported or awarded import of a total of 17 spot LNG cargoes since its resumption of spot LNG import after a hiatus of seven months, according to the Petrobangla.
Despite payment delay, the LNG suppliers – both long-term and spot – are continuing their supply to Bangladesh, the sources added.
Source: Financial Express