2024-09-04 07:31:14
An initiative has been taken to import 20 cargoes of LNG from the spot market for 4 months through 23 listed companies that have signed a Master Sale and Purchase Agreement (MSPA) with Petrobangla to meet the urgent gas needs of the country.
Sources said a proposal for in-principle approval to import 20 cargoes of LNG from the spot market under the Public Procurement Rules, 2008 will be presented in the next Economic Affairs Advisory Committee meeting.
Finance and trade adviser and chairman of the committee next Wednesday. According to sources in the Department of Energy and Mineral Resources, a proposal in this regard will be presented in the committee meeting under the chairmanship of Salehuddin Ahmed.
This is the first meeting of the committee after the formation of the interim government.
According to sources, the demand of gas in the country in various sectors including electricity, fertilizer, industrial sector is 3800 mmcf (less/more) per day. The maximum capacity of gas supply in the country is 3150 mmcf per day (min/min) which is 82% of the demand. The average domestic production of total supplied gas is 2050 mmcf per day (min/min) and the remaining around 1100 mmcf per day (min/min) of gas is imported in the form of LNG. Two floating LNG terminals with a capacity of 600 mmcf per day by Accelerate Energy Bangladesh Limited and 500 mmcf per day by Summit LNG Terminal Company Private Limited have been set up at Maheshkhali in Cox’s Bazar. Currently 2.5 MTPA of LNG is being imported from Qatar’s Ras Laffan Liquefied Natural Gas Company Limited (Qatargas) over a period of 15 years and 1.0 MTPA of LNG is currently being imported from Oman Trading International (OQT) over a period of 10 years under the agreement signed with Petrobangla on G2G basis. . Besides, LNG is imported from the spot market based on the gas demand.
According to sources, the government gave in-principle approval on November 10, 2016, for processing under the ‘Prompt Enhancement of Supply of Electricity and Energy (Special Provisions) Act, 2010’ for the purchase of LNG from the spot market. Under this act, expressions of interest (EOI) were invited for preparation of list of suppliers for procurement of LNG from the spot market on June 8, 2017, published in the national gazette, on the websites of CPTU, Petrobangla and RPGCL.
According to sources, the international standard MSPA was prepared with the help of international legal consultants. All the terms and conditions that are generally mentioned in international standard tender notices, tender documents and contract documents are included in the MSPA. Out of the 29 companies short-listed among the applications submitted within the stipulated time, 17 companies signed the SSPA. Subsequently, with the vetting of the Legislative and Parliamentary Affairs Department and the approval of the Cabinet Committee on Economic Affairs, 14 companies signed the MSPA with Petrobangla within the stipulated time.
According to sources, the number of MSPA signatories has been increased to 23 following due process for more competition. It should be noted that among the 23 companies mentioned, there are also well-known companies in the world in LNG supply. A total of 97 times (including re-tenders) bids were invited for importing 74 cargoes of LNG from the spot market from September 2020 till now, while 12 out of 23 firms participated in the bids at various times.
According to sources, after assessing the demand for gas, the in-principle approval of the minister is taken for importing LNG from the spot market for a specified period. E-mails are sent to MSPA signatories for submission of bids with a minimum of 3 days for importing LNG from the spot market by fixing the delivery window as per the demand. Bids are accepted through LNG Spot Purchase (LSP) software developed for the purpose of receiving bids. The 23 MSPA signatories are registered in the LSP software and each institution submits its proposal through a unique ID. Following the report of the bid acceptance and evaluation committee, confirmation notice (agreement) is signed in light of MSPA with the responsive lowest bidder, subject to the recommendation of the PPC and the approval of the Cabinet Committee on Government Procurement. It takes 8 to 12 days for the process from inviting bids to signing the contract.
Petrobangla plans to import a total of 20 cargoes of LNG from September to December (6 cargoes in September, 5 cargoes in October, 5 cargoes in November and 4 cargoes in December) along with domestic gas produced to meet gas demand.
According to sources, to meet the urgent need, an initiative has been taken to import 20 cargoes of LNG from the spot market to meet the demand of four months. However, importing LNG under state-level contracts is somewhat time-consuming. For this reason, LNG is imported from the spot market as an alternative to imports under state contracts.