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The government has resumed purchasing liquefied natural gas from the spot market ending more than six months suspension since its price went up in the global market.
A cabinet committee on government purchases on Wednesday approved a proposal from the energy division to import one cargo of LNG from the spot market under a competitive bidding as its price fell slightly.
The government decision to resume LNG import came on the heels of an executive order in the past month.
Through the executive order, the government hiked retail piped gas prices in four consumer categories by up to 179 per cent. The hike became effective since Wednesday.
Officials attending the meeting said that about 33,600MMBtu LNG would be procured later this month.
They added that the procurement deal was won by the French company, Total Energies, quoting $19.74MMBtu against three other bidders.
Since July 2022, the government stopped purchasing LNG from the spot market as it price increased significantly in the global market because of the war in Ukraine.
Previously, the country purchased spot LNG cargo for June 22-23 delivery at $24.25 per million British thermal unit or MMBtu, according to Petrobangla officials.
The prices went further in July, with the average price for August delivery estimated at $40.50 per MMBtu.
The suspension of LNG import from the spot market affected power production leading to widespread power outages in the past summer.
The country is relying on imported natural gas to generate power for nearly three quarters. It also imports LNG under long-term deals with countries like Qatar and Oman.
The Petrobangal has targeted to procure more LNG cargos from the spot market following a fall in the item’s price in the spot market.
Its officials, however, said that the price was still higher than the price under the long-term deal.
They also stated that the country imported about 300-400 million cubic feet of LNG daily through a 10-year import deal with Oman and a 15-year import deal with Qatar.
The cabinet committee meeting was presided over by agriculture minister Md Abdur Razzaque in absence of finance minister AHM Mustafa Kamal who is now abroad.
Additional secretary Sayeed Mahbub Khan of the cabinet division told reporters that the cabinet committee approved 11 proposals, but he failed to give details of the proposals.
The committee approved two proposals from the Trading Corporation of Bangladesh to purchase 1.65 crore litres of soya bean oil from local suppliers under the direct purchase method.
It also approved a proposal from the roads and highways department to award a package – upgrading the Dhaka-Sylhet highway into six lanes – to a joint venture comprised of Hego of China and Mir Akhter of Bangladesh.
The joint venture won the contract among nine other bidders quoting Tk 11,078 crore in a competitive bidding to construct over a 200-kilomatre road.
In February 2021, executive committee of the National Economic Council approved Tk 16,919 crore South Asia Sub-regional Economic Cooperation Dhaka-Sylhet Corridor Road Development project.
Of the project cost, about Tk 13,245 crore will come as loan from the Asian Development Bank and Tk 3,674 crore from local contribution.
(NA)
