Government will buy 18 cargoes of LNG from TotalEnergies in 9 months

The government will import 18 cargoes of liquefied natural gas (LNG) from France-based multinational company TotalEnergies in the next nine months to tackle the fuel crisis. A plan has been taken to import two cargoes of LNG every month from October of the current year to June of the next year. If necessary, more cargoes can be purchased with the consent of both sides.

The proposal was given policy approval at a meeting of the Cabinet Committee on Government Purchase held under the chairmanship of Finance Minister Amir Khasru Mahmud Chowdhury on Wednesday (September 9). These LNG will be purchased from TotalEnergies following the direct purchase method in the case of international purchase.

However, the price of LNG has not been finalized yet. As per the rules, discussions on the price will be held between Petrobangla and TotalEnergies after approval of the concerned committee. Once the price is finalised through discussion, it will be presented for approval of the Cabinet Committee on Government Purchase. After getting approval, an agreement will be signed between the two sides.

The Public Relations Department of the Finance Ministry has informed that this initiative to purchase LNG from TotalEnergies has been taken to meet the country’s emergency gas demand due to the war in the Middle East and unstable geopolitical situation. If necessary, additional LNG beyond the fixed 18 cargoes may also be imported with the consent of both sides.

Bangladesh has long-term LNG import agreements with Qatar and Oman. However, a crisis has been created in the country’s gas supply as the two countries could not supply LNG as per the agreements in the context of the Iran war. In this situation, meeting the gas demand in various sectors including power and industry has become a big challenge for the government.

To tackle the crisis the government is on the one hand purchasing LNG from the spot market at comparatively higher prices and on the other hand looking for alternative sources. As part of this, the government has also approved a proposal for a long-term agreement to import LNG from US company Gunvor until 2038.

The government believes that this new initiative with TotalEnergies will somewhat reduce the pressure on the country’s gas supply in the short term as well as increase alternative sources to tackle supply risks in the international market.