Bangladesh rushes to buy three more LNG cargoes amid rising Gulf tensions

Bangladesh has moved to buy three additional liquefied natural gas (LNG) cargoes from the spot market for May delivery in its rush to secure supply amid fears of supply cuts from the Gulf region, especially Qatar, one of the world’s largest exporters of gas.

With the initiative, the government has floated tenders to buy 12 LNG cargoes from the spot market since the start of the US-Israel war on Iran on February 28.

The delivery of nine cargoes for April has been confirmed, though at much higher prices, said a senior official of Rupantarita Prakritik Gas Company Ltd (RPGCL), a state-run entity.

Bangladesh has to pay around $20 per million British thermal units (mmbtu) to buy LNG as prices have surged amid strained supply after the war on Iran began, and the conflict has inflicted damage on production sites and export hubs in the Gulf countries, including the Ras Laffan Industrial City complex in Qatar, which is home to processing units for LNG, according to reports.

Average prices of LNG cargoes were $10–11 per mmbtu during normal market conditions, said the official on condition of anonymity.

The RPGCL invited price proposals in a notice published on its website on April 1, seeking delivery between May 2 and May 9.

Bangladesh currently meets nearly 30 percent of its gas demand through imported LNG, as domestic production falls short of the daily requirement of around 2,650 million cubic feet.

The ongoing war on Iran has disrupted shipments of energy and fertiliser through the Strait of Hormuz, which handles about 25 to 30 percent of global oil and 20 percent of LNG trade. 

This has pushed up global energy prices and intensified competition for supplies among key importing countries.