LNG price surge continues as Bangladesh pays record spot price

Quantum Commodity Intelligence - Bangladesh has paid a record import price for a spot cargo of liquid petroleum gas (LNG) as consuming nations scramble for supplies ahead of the crunch winter months.

Local media reports said that Vitol Asia Pte Ltd supplied the 138,000 cubic meter cargo to Bangladesh at around $28-$29 per million British thermal unit (MMBtu), a record price paid by the South Asian country after if issued a 'short-notice tender' as the government attempts to cope with surging demand for natural gas to feed industries and power plants.

A second cargo offered at around $35/MMBtu was declined, but the country is expected to issue further tenders in early October.

Bangladesh imports five to six LNG cargoes from term suppliers each month at an average price of around $10 per mmBtu but earlier this month said it would resume spot purchases ahead of winter.

While $28/MMBtu price is a record for Bangladesh, the highest recorded spot price came last winter amid the sustained cold snap across Northeast Asia, when trading house Trafigura bought a cargo for delivery in mid-February from Total Gas and Power Asia at $39.30/MMBtu.

On Monday, Asian JKM futures for the Nov21 to Feb22 months surged above $29/MMBtu, rising to over $29/MMBtu Tuesday.

European natural gas prices hit record highs this week, while US natural gas is trading at 7-year highs.

Although Bangladesh does not have cold weather demand in the same way as northeast Asia does, it still has to take part in a highly competitive market. China has been stepping up spot buying programs this month amid widespread power shortages across the country.

State-run Petrobangla had suspended spot market procurement in early August but resumed again in September on fears over critical storage levels.