As the Middle East conflict increases costs, Bangladesh secures LNG spot cargoes
Energy officials reported that Bangladesh purchased three LNG cargoes at higher prices on the spot markets, as it scrambled to maintain supplies in the face of disruptions caused by the escalating conflict between Iran and Israel.
Energy officials in South Asia said that Petrobangla, the state-run energy company, has increasingly turned to the volatile market to fill the gap after certain suppliers had to stop shipments.
An anonymous official from the energy ministry said that if the disruption continues, we will have to rely more on expensive spot?LNG. This will increase our import burden, and tighten supply for power and industry.
The country of around 175 million people relies on imported energy for about 95% of their needs. The?war in Iran has disrupted Middle East oil exports, and the country has implemented fuel rationing on?vehicles. It also curbed diesel sales.
TotalEnergies is supplying one cargo at a price of $21.58 per million British Thermal Units (mmBtu), for delivery between April 5 and 6. Posco International Corporation will deliver two cargoes at a price of $20.76 each per mmBtu, for delivery between April 9 to 10, and April 12 to 13, respectively.
These purchases come after QatarEnergy, citing disruptions in LNG deliveries to Bangladesh as part of a long-term agreement, suspended LNG delivery.
Petrobangla has also ordered additional LNG spot cargoes to cover the shortfall.
A shipment of?Gunvor's mmBtu at $28.28 is due to arrive between March 15 and 16. Another cargo, priced at $23.08, will be arriving from Vitol from March 18 to 19.
These latest purchases represent a significant increase in Bangladesh's previous LNG purchases this year. In January, it secured spot cargoes for about $10 per mmBtu. This reflected a rapid increase in price as tensions grew.
Gas rationing has led to the closure of four fertiliser factories, in order to focus on power generation and other important areas.
(source: Reuters)
