Qatar Petroleum to supply 1.25m tonnes of LNG to Bangladesh

[Black_cats]

Qatar Petroleum to supply 1.25m tonnes of LNG to Bangladesh

QP signs a long-term agreement with Vitol to supply 1.25 million tonnes of liquefied natural gas annually to Vitol customers in Bangladesh.

QP’s recently announced expansion at its North Field East project would help Qatar again become the world's largest LNG producer by 2030 [File: stringer/Reuters]
22 Feb 2021

Qatar Petroleum has signed a long-term agreement with Vitol, under which it would supply 1.25 million tonnes of liquefied natural gas annually to Vitol customers in Bangladesh.
Under the agreement, LNG deliveries will start later this year, QP said in a statement on Monday.

Qatar’s Energy Minister and CEO of Qatar Petroleum Saad bin Sherida Al Kaabi welcomed the agreement.

“We are pleased to sign this SPA (Sale and Purchase Agreement) with Vitol, and we look forward to commencing deliveries under the SPA to further contribute to meeting Bangladesh’s energy requirements.

“This SPA also highlights our strong ability to meet the requirements of our partners and customers. We are proud to continue to be the supplier of choice for our customers and partners around the globe,” Al Kaabi added.

Vitol is a Dutch energy and logistics giant, which has grown into the world’s largest independent oil trader, with annual revenues comparable to Apple.

In 2019, the company handled more than 8 million barrels of crude oil and petroleum products a day, according to Bloomberg. To meet global demand for cleaner energy sources, Vitol has been beefing up its natural gas and electricity trading.

Bangladesh, with a population of 163 million, is expected to become a major LNG importer in Asia, along with Pakistan and India, as domestic gas supplies fall.

The country currently has two floating storage and regasification units (FSRUs) with a total regasification capacity of 28 million cubic metres (1 billion cubic feet) per day – equal to about 7.5 million tonnes a year.

Bangladesh imported 3.89 million tonnes of LNG in 2019 – through two long-term contracts with Oman Trading International and Qatargas, Reuters reported.

Qatar Petroleum to supply 1.25m tonnes of LNG to Bangladesh

QP signs deal to supply 1.25 million tonnes of LNG annually to Vitol customers in Bangladesh.

www.google.com

 

[farok84]

Qatar Petroleum to supply 1.25m tonnes of LNG to Bangladesh

QP signs a long-term agreement with Vitol to supply 1.25 million tonnes of liquefied natural gas annually to Vitol customers in Bangladesh.

QP’s recently announced expansion at its North Field East project would help Qatar again become the world's largest LNG producer by 2030 [File: stringer/Reuters]
22 Feb 2021

Qatar Petroleum has signed a long-term agreement with Vitol, under which it would supply 1.25 million tonnes of liquefied natural gas annually to Vitol customers in Bangladesh.
Under the agreement, LNG deliveries will start later this year, QP said in a statement on Monday.

Qatar’s Energy Minister and CEO of Qatar Petroleum Saad bin Sherida Al Kaabi welcomed the agreement.

“We are pleased to sign this SPA (Sale and Purchase Agreement) with Vitol, and we look forward to commencing deliveries under the SPA to further contribute to meeting Bangladesh’s energy requirements.

“This SPA also highlights our strong ability to meet the requirements of our partners and customers. We are proud to continue to be the supplier of choice for our customers and partners around the globe,” Al Kaabi added.

Vitol is a Dutch energy and logistics giant, which has grown into the world’s largest independent oil trader, with annual revenues comparable to Apple.

In 2019, the company handled more than 8 million barrels of crude oil and petroleum products a day, according to Bloomberg. To meet global demand for cleaner energy sources, Vitol has been beefing up its natural gas and electricity trading.

Bangladesh, with a population of 163 million, is expected to become a major LNG importer in Asia, along with Pakistan and India, as domestic gas supplies fall.

The country currently has two floating storage and regasification units (FSRUs) with a total regasification capacity of 28 million cubic metres (1 billion cubic feet) per day – equal to about 7.5 million tonnes a year.

Bangladesh imported 3.89 million tonnes of LNG in 2019 – through two long-term contracts with Oman Trading International and Qatargas, Reuters reported.

Qatar Petroleum to supply 1.25m tonnes of LNG to Bangladesh

QP signs deal to supply 1.25 million tonnes of LNG annually to Vitol customers in Bangladesh.

www.google.com

Hi,
Any info on the pricing, contract type?

 

[farok84]

The LNG King Embarks on Sales Campaign After Approving Expansion

Executives from the top exporter of liquefied natural gas are jetting around the globe in a whirlwind bid to strike competitive deals with the fastest growing customers. They need to.

www.bloomberg.com

"In the rush to ink deals, Qatar agreed to rates well below those they were demanding less than a decade ago. Pakistan’s latest contract is at a 10.2% link to oil prices, compared to 13.37% in 2016. The Bangladesh deal was done below the 11% mark, according to traders, who requested anonymity to discuss private details."


The price is rumored to be 10.8%. Note, this is the price between Vitol & Qatar, the contract price between Vitol & Bangladesh will be a higher percentage than this.

 

[bluesky]

The LNG King Embarks on Sales Campaign After Approving Expansion

Executives from the top exporter of liquefied natural gas are jetting around the globe in a whirlwind bid to strike competitive deals with the fastest growing customers. They need to.

www.bloomberg.com

"In the rush to ink deals, Qatar agreed to rates well below those they were demanding less than a decade ago. Pakistan’s latest contract is at a 10.2% link to oil prices, compared to 13.37% in 2016. The Bangladesh deal was done below the 11% mark, according to traders, who requested anonymity to discuss private details."


The price is rumored to be 10.8%. Note, this is the price between Vitol & Qatar, the contract price between Vitol & Bangladesh will be a higher percentage than this.

Can someone make me understand why the price/rate of a product is shown in (%)? I am perplexed.

 

[farok84]

Can someone make me understand why the price/rate of a product is shown in (%)? I am perplexed.

Hi,

LNG is priced as a percentage of crude oil in most of the world markets. Typical pricing formula is:

P = A * B + C
where,
P = Price of LNG in USD/mmbtu
A = Slope or Percentage (Negotiated by Seller & Buyer)
B = Benchmark (It can be Crude Oil, Brent Oil or JCC or it can be other benchmarks like Henry Hub, Dutch TTF or Platts JKM)
C = Fixed component negotiated by Seller & Buyer

 

[bluesky]

Hi,

LNG is priced as a percentage of crude oil in most of the world markets. Typical pricing formula is:

P = A * B + C
where,
P = Price of LNG in USD/mmbtu
A = Slope or Percentage (Negotiated by Seller & Buyer)
B = Benchmark (It can be Crude Oil, Brent Oil or JCC or it can be other benchmarks like Henry Hub, Dutch TTF or Platts JKM)
C = Fixed component negotiated by Seller & Buyer

Since most of us are naive in the values of P, A, B, and C at present. So, please tell us what could be the current price of a ton of LNG.

 

[farok84]

Since most of us are naive in the values of P, A, B, and C at present. So, please tell us what could be the current price of a ton of LNG.

Hi,

It depends on individual contracts.

For existing Qatar - Bangladesh contract, the price is 12.65% of 3 months averaged Brent + $0.5/mmbtu. At today's Brent price of $64/bbl, this Qatari Lng per tonne is $444.4132.

P = 12.65% x (64) + 0.5 = $8.596/mmbtu or $444.4/ton LNG.

For existing Oman - Bangladesh contract, the price is 11.9% of 3 months averaged Brent + $0.4/mmbtu. This Omani Lng per tonne is $414.4272.

P = 11.9% x (64) + 0.4 = $8.016/mmbtu or $414.4/ton LNG.

 

[bluesky]

Qatar Petroleum to supply 1.25m tonnes of LNG to Bangladesh

Since 1 metric ton liquefied natural gas (LNG) = 48,700 cubic feet of natural gas, therefore, 1.25 million LNG is 60,675 million cubic feet (cft) of petroleum gas. I think Qatar Petroleum will supply BD with this amount of gas in one year.

If this is correct, then about 167 million cft. of gas will be supplied to our national grid daily. Our own gas reserves will shortly be depleted.

However, we must understand that only a reserve of 13 trillion cft gas (and without any other natural resources) in the country has propelled BD too far in economic activities. As the gas reserve dwindles and BD exports rise, within a few years the country will raise its LNG imports.

 

[Destranator]

Since 1 metric ton liquefied natural gas (LNG) = 48,700 cubic feet of natural gas, therefore, 1.25 million LNG is 60,675 million cubic feet (cft) of petroleum gas. I think Qatar Petroleum will supply BD with this amount of gas in one year.

If this is correct, then about 167 million cft. of gas will be supplied to our national grid daily. Our own gas reserves will shortly be depleted.

However, we must understand that only a reserve of 13 trillion cft gas (and without any other natural resources) in the country has propelled BD too far in economic activities. As the gas reserve dwindles and BD exports rise, within a few years the country will raise its LNG imports.

You are correct. For the above reasons, construction of the LNG terminal was a very timely initiative by the govt.