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18 Jul 2022 | 11:51 UTC
By Surabhi Sahu and Azizur Rahman
Highlights
Last spot cargo heard purchased for June 22-23 delivery
Country's LNG re-gasification capacity plunges
New LNG policy to provide stable supplies, trim Petrobangla's losses
Bangladesh has halted its spot LNG imports for both July and August as the country ramps up efforts to slash its energy import bill and reigns in more austerity measures to limit domestic natural gas consumption amid prevailing high global LNG prices, a senior Petrobangla official told S&P Global Commodity Insights July 18.
Platts JKM for September was assessed at $36.594/MMBtu July 18, according to S&P Global data.
Bangladesh was last heard to have purchased a spot cargo for June 22-23 delivery at the Moheshkhali floating, storage and regasification unit at $24.75/MMBtu from Gunvor Singapore Pte Ltd. for a 138,000 cu m cargo.
Bangladesh's LNG re-gasification has also plunged from 854,000 Mcf/d a few weeks ago to 500,000 Mcf/d currently, down 41.5%, with the country now utilizing only half of its overall LNG re-gasification capacity, the official said.
The country's overall natural gas supply now hovers around 2.70 Bcf/d, with re-gasified LNG at around 500,000 Mcf/d, against a total demand of over 4,100 MMcf/d, according to Petrobangla.
Bangladesh's foreign exchange reserves last week declined to $39.77 billion, the lowest in two years, according to updated data from the country's central bank, reflecting soaring energy costs due to the Russia-Ukraine war.
The country's inward remittance also fell to $21.03 billion in the 2021-22 fiscal year ended June 30 from about $24.77 billion in fiscal 2020-21, with the central bank now injecting US dollars into the money market on a regular basis, helping banks settle import bills.
Bangladesh's latest plight comes as other Asian countries such as Sri Lanka and Pakistan have also been severely hit by the energy crisis.
To address its energy shortage problems and provide security of supplies, Bangladesh's Energy and Mineral Resources Division, under the Ministry of Power, Energy and Mineral Resources, has drafted a structured LNG subsidy policy for state-run Petrobangla and is planning to implement it in the coming months, the Petrobnagla official said.
Once adopted, the country's finance ministry will provide a subsidy to Petrobangla on a regular basis to import LNG from both long-term suppliers and spot markets, he said, adding that this will ensure stability of supplies while also cutting Petrobangla's losses.