BD revokes old LNG supplier list
Staff Reporter :
There is now an opportunity for local companies to collaborate with potential international spot suppliers through joint ventures, ensuring a stable supply of LNG to Petrobangla and enhancing energy security and market participation.
This change has been introduced in the tender floated by the Rupantarita Prakritik Gas Company Limited (RPGCL), the procuring agency and a subsidiary of the state-owned Bangladesh Oil, Gas & Mineral Corporation (Petrobangla).
“We have introduced this change to create business opportunities for local firms,” said Engr Md Rafiqul Islam, Managing Director of RPGCL.
A total of 43 international LNG suppliers submitted their Expression of Interest (EOI), and 22 companies were shortlisted to supply LNG.
However, despite this large number, only 3 to 4 companies with alleged business connections to the previous Awami League regime had been selected to supply LNG from the international spot market to Petrobangla, according to sources.
“We hope this time that many more international LNG suppliers will show interest in supplying LNG from the spot market,” he added.
As part of efforts to establish a fresh shortlist of international spot market LNG suppliers, RPGCL floated an open tender on 10 November, seeking EOIs from interested suppliers.
According to the tender notice, LNG suppliers must submit their EOI by 12:30 pm on 1 December 2024.
Bangladesh has been importing LNG from the international spot market since 2019 to meet growing gas demand. Under the previous Awami League administration, 17 companies were initially listed based on the Speedy Increase of Power and Energy Supply Act 2010. Later, 5 additional companies were added to the list.
Petrobangla has been importing LNG from these companies, but it was observed that a few companies consistently secured contracts, dominating the business.
These companies include Vitol Asia (Singapore), TotalEnergies (Switzerland), Excelerate Energy (USA), and Gunvor (Singapore).
There have been allegations that some of these companies had business interests with former ministers, state ministers of the previous Awami League government, and local business groups.
After the fall of the Awami League government, the interim administration decided to suspend the Speedy Increase of Power and Energy Supply Act 2010 and instead import LNG from the spot market under the Public Procurement Rule 2008.
It was also decided to scrap the list of companies to bring greater transparency to the bulk LNG import process, as the government spends more than a billion dollars annually on LNG imports.
As part of this decision, Petrobangla has prepared a fresh list of interested companies through an open and transparent process.
“We have decided that once the new list of companies is finalised, we will cancel the previous list of 23 companies,” said Zanendra Nath Sarker, Chairman of Petrobangla. Energy industry insiders believe the new move will encourage more reputable international companies to supply LNG to Bangladesh from the international spot market.
“This will also help secure LNG at a much lower rate, which will ultimately reduce the government’s energy costs,” said an energy expert, wishing to remain anonymous.
Bangladesh is facing a severe gas crisis, producing 3,100 MMCFD of gas per day against a demand of around 4,000 MMCFD.
Of the total production of 3,100 MMCFD, approximately 1,100 MMCFD is imported, with 150-200 MMCFD sourced from the spot market and the rest imported under long-term contracts from Qatar and Oman.
Petrobangla has planned to import a total of 115 LNG cargoes, both short- and long-term, to meet local gas demand.
