After Qatar's LNG supply was halted, Bangladesh saw a steep increase in LNG prices

After Qatar suspended LNG deliveries amid the escalating Iran/Israel conflict, Bangladesh will be forced to pay much higher prices on the spot market. This has led the authorities in Bangladesh to ration gas and close several fertiliser factories.

Officials said that the state-run Petrobangla had arranged for two LNG spot cargoes to be delivered in March, to ensure supplies are not interrupted.

A shipment from Gunvor is priced at $28,28 per million British Thermal Units (mmBtu), and is scheduled to arrive between March 15-16. Another shipment from Vitol is priced at $23,08 per mmBtu. Both are due for delivery on March 18-19.

Prices have risen dramatically compared to the previous year.

In January, Bangladesh was able to secure spot cargoes for around $10 per mmBtu. This included a shipment of 3.36 million mmBtu from TotalEnergies - scheduled for delivery on Jan. 4-5 - at $10.37 per mmBtu and another from Posco International slated for delivery on Jan. 9-10 at $9.99 per mmBtu.

Petrobangla's second official stated that the government was forced to use the spot market when QatarEnergy stopped its long-term contracts and invoked "force majeure" due to disruptions related to the Iran-Israel war.

The official said that "with supplies under the long term contract disrupted we had to?arrange cargoes on the spot market, despite the high prices."

Both officials spoke under the condition of anonymity, as they weren't authorised to talk?to media.

Gas rationing has been implemented by the government to prioritize power generation and other vital sectors.

Officials warned that if this disruption persists, Bangladesh could be forced to rely more on the volatile spot market for LNG, increasing its energy import bills. (Reporting and editing by Clarence Fernandez; Ruma Paul)

(source: Reuters)