Bangladesh is increasingly concerned about the surge in LNG spot prices as its domestic demand is set to double from the current level of 4 million mt/year within two years, Energy Minister Tawfiq e-Elahi Chowdhuri told S&P Global Platts.
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The current spike in spot LNG prices was making Bangladesh "regret" its pathway to depending on LNG amid volatility in the market, Chowdhuri told Platts Sept. 21 on the sidelines of the Gastech 2021 conference in Dubai.
"It's terrible, it's terrible you know. It's hurting us," Chowdhuri said. "Neither the government nor the industry can be at this volatility."
Asian LNG spot prices extended the uptrend Sept. 21 on higher trade levels following rising prices in the Atlantic Basin, with the Platts JKM for November assessed at $28.538/MMBtu.
State-run Petrobangla halted spot LNG imports in the first week of August under instructions from the Energy and Mineral Resources Division in view of rising spot prices that were trading at around $15/MMBtu at the time. Bangladesh's last spot LNG cargo for August was purchased at $13.069/MMBtu, and most recent term cargoes at around $9/MMBtu.
The Bangladeshi energy minister's comments came as the South Asian country weighs LNG supply options to meet its domestic demand growth.
"Now we are importing about 4 million mt a year," Chowdhuri said. "In two years time, it's going to be double."
Still, Bangladesh will need to "have a balancing act" to find new LNG suppliers amid volatility in the spot market, he said.
"We have to find the strategy you know, but we have two long-term contracts; one with Qatar and another with Oman," Chowdhuri said. "They helped us in some sense to keep our price predictable."
Bangladesh has long-term LNG supply deals with Qatar's Qatargas and Oman's Oman Trading International, and Petrobangla has also imported spot LNG since September 2020.
"I hope the suppliers of LNG, they also start shifting their [price index to] Henry Hub and oil," he said, noting that Henry Hub prices were less volatile.
Asked whether the current volatility in the LNG spot market was encouraging Bangladesh to seek alternatives, Chowdhuri said: "I personally think nuclear is the answer."
"We are going to start two [nuclear] units next year --2.5 GW," he said. "I personally feel that for a country like Bangladesh, [small] modular nuclear reactors, those are the answers."