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Oil report

Bangladesh to increase spot LNG imports because of rising demand

DHAKA, Oct 14 (Reuters) - Bangladesh is expected to double its imports of liquefied natural gas (LNG) from the spot market starting in December as demand rises and to capitalise on low prices of the super-chilled fuel, two energy officials told Reuters.

Bangladesh’s state-run Rupantarita Prakritik Gas Company is seeking 138,000 cubic metres of so-called lean LNG, which has a lower energy content, for Dec. 9-10 delivery, said the two officials, one from Rupantarita and one from Petrobangla, the state-owned company that is in charge of LNG imports into the South Asian country.

Rupantarita, a subsidiary of Petrobangla, may issue a second tender next week for a similar volume of lean LNG for end-December delivery, the two officials said.

The second tender will increase the number of LNG cargoes purchased under short-term, or spot, contracts, to two per month from one currently, said the Petrobangla official. The imports are needed to meet rising demand and as prices remain lower than normal.

Spot LNG prices for Asia LNG-AS were estimated at $5.50 per million British thermal units (mmBtu), which is up from the record low hit earlier this year but still 29.6% below its five-year average.

Rupantarita Prakritik bought Bangladesh’s first spot LNG cargo ever from trading house Vitol at $3.8321 per mmBtu for delivery over late September to early October. The company is also currently assessing offers for its second spot cargo for Nov. 12-13 delivery.

Bangladesh, with a population of about 160 million people, is expected to become a major LNG importer in Asia, along with Pakistan and India, as domestic gas supplies fall.

The country currently has two floating storage and regasification units (FSRUs) with a total regasification capacity of 1 billion cubic feet per day - equal to about 7.5 million tonnes a year.

Bangladesh imported 3.89 million tonnes of LNG in 2019 through two long-term contracts with Oman and Qatar.

Reporting by Ruma Paul; Additional reporting by Jessica Jaganathan in Singapore; Editing by Christian Schmollinger

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