Bangladesh Drops Trafigura in LNG Talks as Gunvor Advances

Posted by Joseph Keefe
Wednesday, May 16, 2018
Bangladesh has terminated talks with Swiss-based commodity trader Trafigura to install a small floating liquefied natural gas (LNG ) import terminal due to delays in agreeing terms, while rival trader Gunvor advances with a separate project.
Once considered an energy backwater, Bangladesh's LNG demand is set to hit 17.5 million tonnes annually by 2025 after importing its first cargo last month, and as traders target Southeast Asia's booming gas markets to boost sales.
Swiss-based commodity traders Trafigura, Vitol and Gunvor were all pursuing LNG import projects in Bangladesh, and smaller peer AOT Energy has provisionally agreed to supply the country with 1.25 million tonnes annually for 15 years.
Trafigura, which also aims to build floating LNG import terminals in Pakistan and Britain, delayed agreeing terms to supply fertiliser producer Chittagong Urea Fertilizer Co. via a floating import facility on the Karnaphuli river, an official at a state-run energy firm said.
"We are not going ahead with Trafigura, we can't wait for long for their response," a director at state-run energy firm Petrobangla's LNG division told Reuters.
Trafigura declined to comment.
By contrast, rival trader Gunvor is moving forward with plans to set up a floating storage and regasification unit (FSRU) barge a stone's throw from Trafigura's proposed project, officials and industry sources said.
Gunvor partnered with Belgium shipping firm Exmar on its Bangladesh venture, which will supply the Karnaphuli Fertilizer Company.
Exmar announced on Monday it executed a 10-year charter with Gunvor for its 25,000-cubic-metre-capacity FSRU barge for Bangladesh.
The barge, built by China's Wison Offshore and Marine, is due to arrive in Bangladesh in the fourth-quarter this year and start operations after its full commissioning, Exmar said.
A draft of a deal between Gunvor and state officials was vetted by the law ministry and the government's purchase committee, officials said.
Trader Vitol, meanwhile, is pushing to develop a small-scale FSRU alongside the ageing Sangu gas platform in the Bay of Bengal, after beating international oil companies, including Exxon Mobil, to the contract.
A provisional deal under which AOT Energy will supply Bangladesh with LNG for 15 years is also moving closer to reality.
In March a senior Petrobangla official travelled to Switzerland to verify AOT Energy's financial strength after senior executives left the trading firm amid a shrinking credit line and losses in some trading operations.
As a result of that meeting, Petrbangla is working on a final draft of a deal with AOT, officials there said.
Bangladesh secured more competitive LNG pricing with AOT compared to its contract with Qatar, officials said.
Under its 15-year, 2.5 million tonnes per annum deal with Qatar, Bangladesh agreed to pay 12.65 percent of the three-month average price of Brent oil plus a constant of $0.50 per mmBtu.
Bangladesh also has a 10-year LNG import deal with Oman Trading International for 1 million tonnes annually.

That LNG will be priced at 11.9 percent of the three-month average price of Brent plus a $0.40 per mmBtu constant. 

By Ruma Paul and Oleg Vukmanovic

Categories: Contracts Energy Finance Legal LNG Logistics Tankers

Related Stories

MDL Secures Cable Laying Job in Asia Pacific

Brownfield Output Decline Accelerates, says IEA

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Japan Picks Wood Mackenzie to Assess Trump-Backed Alaska LNG Scheme

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

China Starts Production at Major Oil Field in Bohai Sea

Woodside Finds South Korean Partners to Advance LNG Value Chain

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Current News

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

SBM Offshore, SLB to Optimize FPSO Performance Using AI

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com