Bangladesh drops Trafigura in LNG talks as Gunvor advances

Once considered an energy backwater, Bangladesh’s LNG demand is set to hit 17.5 million tpy by 2025 after importing its first cargo last month, and as traders target Southeast Asia’s booming gas markets to boost sales.

Swiss-based commodity traders Trafigura, Vitol and Gunvor were all pursuing LNG import projects in Bangladesh, and smaller peer AOT Energy has provisionally agreed to supply the country with 1.25 million tpy for 15 years.

Trafigura, which also aims to build FLNG import terminals in Pakistan and Britain, delayed agreeing terms to supply fertiliser producer Chittagong Urea Fertilizer Co. via a floating import facility on the Karnaphuli river.

By contrast, rival trader Gunvor is moving forward with plans to set up a floating storage and regasification unit (FSRU) barge a stone’s throw from Trafigura’s proposed project.

Gunvor partnered with Belgium shipping company Exmar on its Bangladesh venture, which will supply the Karnaphuli Fertilizer Company.

Exmar announced on 14 May that it had executed a 10-year charter with Gunvor for its 25 000 m3 capacity FSRU barge for Bangladesh.

The barge, built by China’s Wison Offshore and Marine, is due to arrive in Bangladesh in the fourth-quarter this year and start operations after its full commissioning, Exmar said.

A draft of a deal between Gunvor and state officials was vetted by the law ministry and the government’s purchase committee.

Trader Vitol, meanwhile, is pushing to develop a small-scale FSRU alongside the ageing Sangu gas platform in the Bay of Bengal, after beating international oil companies, including Exxon Mobil, to the contract.

A provisional deal under which AOT Energy will supply Bangladesh with LNG for 15 years is also moving closer to reality.

In March a senior Petrobangla official travelled to Switzerland to verify AOT Energy’s financial strength after senior executives left the trading firm amid a shrinking credit line and losses in some trading operations.

As a result of that meeting, Petrbangla is working on a final draft of a deal with AOT.

Bangladesh secured more competitive LNG pricing with AOT compared to its contract with Qatar.

Under its 15-year, 2.5 million tpy deal with Qatar, Bangladesh agreed to pay 12.65% of the three-month average price of Brent oil plus a constant of US$0.50 per mmBtu.

Bangladesh also has a 10-year LNG import deal with Oman Trading International for 1 million tpy.

That LNG will be priced at 11.9% of the three-month average price of Brent plus a US$0.40 per mmBtu constant.

Read the article online at: https://www.lngindustry.com/regasification/16052018/bangladesh-drops-trafigura-in-lng-talks-as-gunvor-advances/