Qatar will provide additional 2 million tons of LNG to Bangladesh
Qatar has agreed to increase its supply of LNG (liquefied natural gas) by another 2 million tons per year in a long-term deal. The Division of Energy and Mineral Resources has confirmed the preparations for the signing of a formal agreement between Dhaka and Doha on June 1 in Qatar.
Qatar has been supplying 2.5 million tons of LNG per year under the previous agreement. If the new LNG is added, the quantity will stand at 3.5 million tons. But this gas is not coming to Bangladesh now. It will gradually increase from 2025 onwards. Sources from the Division of Energy and Mineral Resources will come to full capacity from 2027.
On June 1, a high-level team led by Minister of State for Power, Energy and Mineral Resources Nasrul Hamid left for Qatar to sign the agreement. Secretary of Energy and Mineral Resources Division Md. Khaeruzzaman Majumdar is with the State Minister in the team along with Chairman of Petrobangla Janendra Nath Sarkar and Deputy General Manager (LNG) Engineer Abdul Mukit of Transforming Natural Gas Company Limited.
The practice of hiding the price of LNG is noticeable at all times. As usual this time too, none of the officers agreed to open their mouths. However, an official of Petrobangla said that compared to the previous contract, this time the price is slightly lower. But other conditions may be a bit uncomfortable for Bangladesh. He could not give an idea about the conditions.
Recently, before the Prime Minister's visit to Qatar, Minister of State for Power, Energy and Mineral Resources Nasrul Hamid said that there is a difference of opinion regarding some conditions for importing LNG from Qatar. Earlier in the agreement, if Qatar could not provide the supply, Qatar would pay Bangladesh the additional price it would cost to buy a cargo of LNG in the sport market at that time. In the new contract, this condition has been lifted and proposed to be 15 percent. That is, if the price is high in the open market, if they sell, Bangladesh will suffer. We have asked for a review of that condition.
According to Petrobangla sources, the existing agreement with Qatar states that the supply will not be below 1.8 million tons per year, and will not go above 2.5 million tons. 2.5 million tons are being imported from Qatar and 1 million tons from Oman under long-term contracts. Besides Qatar, the two countries also agreed to increase the import of LNG by 1 million tons from Oman.
Our two FSRUs have a daily supply capacity of 1,000 million cubic feet, RPGCL sources said. A maximum of 95 percent can be used on average. That is, Bangladesh has the capacity to import up to 6 million tons per year. In addition, discussions with the Summit Group are continuing for the establishment of another FSRU. The third FSRU will have a daily import capacity of 1500 million. Discussions on the fourth FSRU are ongoing. An LNG terminal is also under construction. It will have a capacity of 1 thousand mmcfd.
The government had been importing LNG from the open market as well as long-term contracts. But due to the war in Ukraine, the price of LNG in the open market has gone up a lot. For the first time, LNG was bought from the open market for less than $4 per unit. The same amount of LNG had to be paid up to 37 dollars. Currently it is trading around $14.
By reducing the temperature of natural gas to minus 160 degrees Celsius through cooling technology, the gas becomes a liquid. This liquefied natural gas is called LNG. When natural gas is liquefied at normal atmospheric pressure, its volume is reduced by about 600 times. That is, 600 liters of gas can be converted into LNG and filled in a small bottle of only one liter. LNG is made for ease of transportation. After being brought to Bangladesh, it is regasified and supplied to the line.