The Bangladesh Minerals, Oil and Gas Corporation (Petrobangla) has given the green light to a proposed sales and purchase agreement (SPA) for the import of liquefied natural gas (LNG) from Indonesia.
Following the approval of the Petrobangla Technical Committee, the SPA was forwarded to the Power, Energy and Mineral Resources Ministry. After further vetting the proposal, the ministry will send it to the Law Ministry, who will in turn forward it to the Cabinet Committee on Public Purchases for final approval.
It is likely that the deal will be signed by October’s end, said a senior official at the Power, Energy and Mineral Resources Ministry, requesting to remain anonymous.
“The proposal will be ready to be signed by Petrobangla and Indonesia’s state-owned energy company Pertamina, once the Law Ministry clears it and sends it to the Cabinet Committee on Public Purchases, which will give the final approval,” the official added.
A non-binding memorandum of understanding (MoU) on the LNG import was signed by Petrobangla and Pertamina in Jakarta, Indonesia, on September 15 last year. Subsequently, a letter of intent (LOI) was signed by the two companies during a three day visit to Bangladesh by the Indonesian president on January 28.
According to the LOI, Petrobangla, through its subsidiary Rupantarita Prakritik Gas Company Limited (RPGCL), was supposed to ink the SPA with Pertamina by July 30. However, Petrobangla sources said the signing was delayed due to “unavoidable circumstances.”
Indonesia will export about 17.5 million tons of LNG to Bangladesh each year till 2025, the LOI reads.
Pertamina expects the maiden LNG consignment to be shipped between February and April next year, Power Ministry sources said.
During a bilateral meeting between Indonesian Vice-Minister of Foreign Affairs, AM Fachir, and Bangladesh’s State Minister of Power, Energy and Mineral Resources, Nasrul Hamid, in Dhaka on May 6, Bangladesh proposed an MoU be signed for the import of coal and renewable energy, in addition to LNG.
According to a report by Copenhagen-based research firm Ramboll, Bangladesh will need annual imports of about 30 million tons of LNG by 2041, in order to meet rising demand for energy in the country.
On August 8, State Minister of Power, Energy and Mineral Resources, Nasrul Hamid, said gas fields in Bangladesh were being depleted, and could be exhausted in 8-9 years.
Bangladesh currently faces a shortage of 1 billion cubic feet of gas a day (bcfd), with domestic demand at around 3.7 bcfd. The average production of gas in 2009 was nearly 1,750 million cubic feet per day (mmcfd).