DHAKA/SINGAPORE, Oct 8 (Businesshala) – Bangladesh bought two liquefied natural gas (LNG) cargoes for delivery in October at record prices, two industry sources said on Friday, as low inventories in Europe for supplies before winter in Asia. enhances competition with.
The South Asian nation purchased a consignment from merchant Vitol for delivery in mid-October. A government Petrobangla official said one for delivery at $35.89 per million British thermal unit (mmBtu) and another at $36.95 per mmBtu from Gunvor in late October.
“Winter is yet to come, but the prices have gone crazy,” the official said on condition of anonymity.
“It is really difficult to face such unusual prices. At the moment we have no option but to buy to keep the economic activity going.
Asia Spot LNG Prices LNG-AS It rose to a record high of more than $56 per mmBtu, before falling more than $35 per mmBtu on Thursday, as low gas inventories in Europe ramped up competition for LNG with Asia ahead of expected winter demand.
More than half of Bangladesh’s electricity comes from natural gas, although some power plants also run on the heavy fuel oil and diesel.
Record gas prices are giving tough competition to countries such as Bangladesh as they typically import a larger volume of spot cargo than other countries in Asia, leaving them subject to price volatility.
Bangladesh is also reviewing the renewal of leases for five oil-fired power plants, which are nearing expiration despite plans to move from oil to natural gas for power generation.
Last month, it considered dropping the plan to renew leases, as doing so was not cost-effective, but power ministry officials have said the plan is now back on the table.
“An energy crisis is coming,” one of the officials told Businesshala. “We need to be prepared. LNG prices are breaking all records. We just don’t know how far it will go. So we are keeping all options open.”
An official of state-run Bangladesh Petroleum Corp said rising oil prices were also affecting the economy, adding that “the government is making a frantic effort to deal with the crisis.” (Reporting by Ruma Paul in Dhaka and Jessica Jaganathan in Singapore; Editing by Clarence Fernandez)