Option open for importing LNG from spot market

The government yesterday gave the green light to liquefied natural gas (LNG) purchase from the global spot market as it looks to ensure an uninterrupted supply for the fast-growing economy.

At present, the government purchases LNG under long-term agreements from Qatar and Oman, and given the rise in geopolitical tension in the region there are risks of supply disruptions.

Now, thanks to the decision taken by the cabinet committee on purchase, the government has the option to purchase LNG from the spot market, which is a public financial market in which financial instruments or commodities are traded for immediate delivery, in the event of supply disruptions arising out of an outbreak of war in the region.

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As per the spot market policy on LNG import, the government can purchase LNG from 17 companies at rates prevailing in the global spot market, according to Finance Minister AHM Mustafa Kamal, who chaired the meeting from where the decision came.

Of the companies, six are from Singapore and four from Japan.

The Japanese firms are Mitsui & Co, Marubeni Corporation, Osaka Gas and Jera Co Inc.

The Singaporean companies are Diamond Gas International, Vitol Asia, Trafigura, Gazprom Marketing & Trading Singapore, Cheniere Marketing LLP and Chevron USA Inc, Singapore.

The other companies are AOT Trading AG from Switzerland, Summit Corporation & Summit Oil and Shipping, Excelerate Energy Limited Partnership from the US, Woodside Petroleum Australia, Eni SPA Italy, Petronas LNG, and China National Offshore Oil Corporation Gas and Power Trading and Marketing Ltd.

The committee also approved the proposal of Saif Powertec for cargo and container handling at the Chattogram Bandar Terminal operation for Tk 303.99 crore for six years.

Although four companies primarily purchased the tender documents, only Saif Powertec participated in the bidding, Kamal said. “As a result, this company was awarded the tender.”

Usually, the government appoints outsourcing companies for handling cargoes and containers at the port. However, in future, the government will handle the activities by itself, the minister said.

Also at yesterday’s meeting, it was decided that Tiger IT’s contract to supply 4.50 lakh smart card motorcycle driving licences will be scrapped.

“The World Bank has blacklisted the company, so we will not purchase the licences from them,” Kamal told reporters after the meeting.

Tiger IT is already supplying smart card motorcycle driving licences under a contract it had won in 2016 to provide 15 lakh cards over a five-year period.

At the meeting it was decided that the contract for 4.50 smart cards would be given to one of the companies that had participated in the bidding at the same rate as Tiger IT.

Tiger IT had offered to supply 4.5 lakh smart card motorcycle driving licences for Tk 21.26 crore, he added.