BANGLADESH'S NEW ENERGY

PLATTS - Bangladesh is planning to step up efforts to liberalize its gas and LNG sectors from 2019 in order to boost private investment and enhance energy security, a move that would likely increase domestic downstream competition and affect the competitiveness of existing oil-linked LNG supply contracts.

The decision is to be implemented across the value chain from infrastructure development and LNG imports to regasification, pipeline distribution and final sale to end-users, the state minister for power, energy and mineral resources Nasrul Hamid said Monday.

"The price of the regasified LNG would be determined by market fundamentals," Hamid said. "Private investors would also be allowed to distribute their regasified LNG through the national gas grid by paying a negotiable wheeling charge."

Similar moves to deregulate and liberalize downstream gas and power sectors by more established LNG importers in India and east Asia have led to more competitive and diverse domestic sectors, increasing the need for risk management and delivery flexibility in LNG supply agreements.

This has reduced demand for long-term oil-linked destination-restricted LNG contracts, in favor of deals that are shorter, smaller, more flexible and priced not against an associated commodity like crude oil, but LNG itself.

It has also increased the number of LNG contract renegotiations and disputes in the region, most notably in India, as importers are no longer selling the regasified LNG into regulated gas monopolies, but increasingly competitive multiplayer environments that are growing more and more exposed to LNG spot fundamentals and prices.

State-owned Petrobangla has binding Brent oil-linked long-term contracts worth 3.5 million mt, including an ongoing deal with RasGas for 2.5 million mt/year over 15 years, and one with Oman Trading International for 1 million mt/year over 10 years starting in 2019.

NEW ENERGY PLAN

Deregulation efforts are part of Bangladesh's newly-formed government's plan to boost supply optionality, price competitiveness and overall energy security in the gas-starved nation, following the Awami League-led alliance's landslide victory in the December 30 general election.

Bangladesh's domestic natural gas, petroleum product and electricity prices have traditionally remained well below international market values, forcing the government to provide heavy subsidies to state-owned importers like Petrobangla.

While the energy ministry has long warned domestic stakeholders over future hikes in gas and energy prices, the plan's implementation is unlikely to be quick or smooth, and could impact the current demand growth rates.

Bangladesh's natural gas production is hovering at around 2.75 Bcf/d against demand of nearly 4 Bcf/d, according to Petrobangla. LNG imports have helped bridged that gap, with 300,000 Mcf/d of re-gasified LNG being supplied to the national grid from the floating, storage and regasification unit Excellence, Bangladesh's first and only LNG import facility, in operation since August last year.

Despite numerous logistical and commercial challenges, Bangladesh is set to become a key LNG importer in the coming years, supported by growing consumption, dwindling domestic reserves and a healthy pipeline of LNG import and gas distribution projects. S&P Global Platts Analytics forecasts Bangladesh's LNG demand to exceed 8 million mt/year by 2023.

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Earlier:

2018, November, 2, 11:50:00 BANGLADESH'S GAS DEMAND UP PLATTS - Bangladesh's natural gas demand projection for fiscal year ending June 2019 has been revised up 8.5% to 1.35 Tcf on rising LNG imports, state-owned Petrobangla's general manager for production and marketing Anwarul Islam said

2018, October, 26, 12:25:00 OMAN'S LNG FOR BANGLADESH PLATTS - Bangladesh is expecting first lean LNG imports from Oman Trading International from May 2019, as part of a sales and purchase agreement signed in May 2018 for 1 million mt/year of LNG over 10 years, managing director with state-owned Rupantorita Praktritik Gas Company Md Quamruzzaman said

2018, October, 22, 11:25:00 BANGLADESH LNG STOPPED PLATTS - Bangladesh has terminated talks with Indian utility Reliance Power to build a new floating storage and regasification unit for LNG imports at Kutubdia Island near Chattogram port, a senior official at the LNG Cell said Thursday.

2018, September, 10, 12:25:00 BANGLADESH LNG ENERGY: $3 BLN PLATTS - Germany's Siemens AG and Bangladesh's state-run North-West Power Generation Company Ltd Friday signed a joint development agreement to develop a 3,600 MW power plant at Payra in southern Bangladesh that will run on regasified LNG.

2018, August, 20, 14:05:00 MITSUBISHI BUYS 25% BALNGADESH LNG PLATTS - Japan's Mitsubishi has agreed to acquire a 25% interest in Bangladesh's Summit LNG import project, which includes a floating, storage and regasification unit, with the remaining 75% held by Summit Corporation, the Japanese LNG trader said in a statement late last week.

2018, June, 4, 13:05:00 BANGLADESH LNG UP EIA - In April 2018, Bangladesh became the newest country to begin imports of liquefied natural gas (LNG). In the next two years, six more countries—Panama, Gibraltar, Russia, Philippines, Ghana, and Bahrain—are expected to start importing LNG, adding a combined 2.1 billion cubic feet per day (Bcf/d) of new regasification import capacity.

2018, March, 4, 11:00:00 RUSSIA - INDIA - BANGLADESH NUCLEAR ROSATOM - ROSATOM, the Ministry of Science and Technology of the People's Republic of Bangladesh and the Department of Atomic Energy of the Government of the Republic of India signed a Memorandum of Understanding on cooperation in the implementation of the Rooppur NPP construction project in Bangladesh. Русский | English