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AOT’s LNG supply deal revived by Bangladesh prime minister’s office

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LNG Industry,

According to Reuters, the Prime Minister of Bangladesh has approved an LNG supply deal with Swiss trader AOT Energy, but the energy ministry will have the final say on whether or not it goes ahead.

According to the statement, the deal is valued a several billions of dollars and is to supply 1.25 million t of LNG for a 15-year period. Reuters claims that the deal has been discussed for a long time, with terms agreed in February last year. In January of this year, Reuters reports that the gas company that oversees Bangladesh’s LNG supplies – Rupantarita Prakritik Gas Co. – said that the deal would not go ahead. Nevertheless, Reuters claims that a document issued by the office of Prime Minister Sheikh Hasina on 28 January proves that the plan has not been scrapped by the government.

According to Reuters, the document said: “In reference to the letter of (the) global head of AOT Energy, the Energy Ministry has been asked to take necessary action for finalising a long-term deal for LNG with AOT Energy.” This document was referring to communication that the prime minister’s office had been sent from AOT regarding the finalisation of a deal.

Reuters reports that the director of the prime minister’s office, Tarikul Islam, confirmed the letter, but noted that this did not officially seal the deal. He said: “Based on a letter from AOT Energy, we have sent a letter to the energy ministry to take necessary action. But this is the ministry’s call whether they want to go ahead with them or not.”

According to Reuters, the terms of the deal have not been disclosed. Nevertheless, looking at the current price of LNG, it is estimated that the deal would be valued at approximately US$6.3 billion. Despite the fact that AOT currently trades LNG on the spot market and has short-term contracts, the deal would be AOT’s first long-term LNG contract.

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