Bangladesh has agreed an MoU between its state-owned energy and mining company Petrobangla and the Malaysian government-regulated supplier Petronas for LNG
The MoU was signed virtually by the Bangladeshi minister of power, energy, and mineral resources Nasrul Hamid and Malaysian government authorities. Both companies expect to finalise the commercial terms for an official contract shortly.
The signing of the agreement comes amidst a surge in demand for LNG following a decline in domestic production in Bangladesh’s power generation sector.
Estimates by the Bangladesh government claim that by 2041, demand for LNG in the nation will grow to 3.15Bn ft3/day, making it crucial for the south Asian nation to prioritise LNG imports.
Petrobangla’s MoU with Petronas follows an extended period of speculation on LNG supply to the country after a deal with AIT energy failed to close before finalisation. In September 2019, two Petrobangla officials discussed a shortlisting spot tender process for importing 1M tonnes of LNG from 17 potential suppliers including Mitsui, Marubeni, CNOOC, Osaka Gas, Jera, Vitol, Petronas, Diamond Gas and Chevron.
Bangladesh has also made plans to ramp up its infrastructure for large-scale imports of LNG, which include building a land-based terminal with a capacity of 7.5M tonnes per year to complement a similar combined capacity from two already-operational storage and regasification centres.
With the implementation of the contract between Petrobangla and Petronas, Bangladesh is expected to become a major LNG importer in south Asia along with Pakistan and India.
Petrobangla received Bangladesh’s first foreign LNG shipment when the Moheshkhali floating LNG terminal was commissioned by Excelerate in August 2018. The shipment signalled the opening of a new market in energy-hungry south Asia.