Cabinet committee on economic affairs approve master plan on LNG buy and sale
The government has short listed 17 companies to buy liquefied natural gas (LNG) in small quantities on the basis of demand placed by Petrobangla.
These companies will be allowed to buy LNG from new sources (countries producing LNG) other than Oman and Qatar, as the government already has long-term purchase agreements with them.
Finance Minister AHM Mustafa Kamal stated this during a press briefing after a meeting of the Cabinet Committee on Economic Affairs (CCEA) at the secretariat on Wednesday.
He said that the purchases will be made at a spot market.
"Some 43 companies submitted Expressions of Interest (EOI) to become vendors for the government.
"Vendors will submit quotation of prices on a particular quantity of demand. The lowest bidder will be awarded the task," the minister told reporters.
He said: "The cabinet committee has also approved a master agreement with regard to purchase and sale LNG by the vendors for the government. The government has a long-term LNG purchase agreement currently with Qatar and Oman. Purchase from these two countries will also continue .
"We want competitive rates to save public money. The number of countries producing LNG have increased. So, we will call for international tenders for purchasing LNG in small quantities when required."
The government started importing LNG in August last year to meet the growing demand for gas in the country in the wake of falling domestic production.
Kamal said the government has spent Tk14,000 crore to subsidise LNG import.
"The price of imported gas was much higher than that produced locally," he added.
According to finance minister, gas production cost per cubic metre stands at Tk14, after the imported LNG is mixed with the locally produced gas.
The government is selling LNG per cubic metre at Tk7.17.
Kamal said the import of LNG was part of the efforts by the government to reduce gas shortages and power outages with the view to unlock the potential of the economy.
He said the increased gas flow would facilitate higher industrial outputs, fertilizer and electricity production in the country.
Earlier, in August last year, the government had imported 500 mmcfd LNG on a pilot basis.