LNG Crisis Drives Up Import Costs for Bangladesh

The ongoing LNG crisis has driven up import costs for Bangladesh as global prices surge and long-term suppliers suspend deliveries. Petrobangla, the state-run energy company, has been forced to rely on expensive spot market imports after failing to secure needed LNG through tenders.

In recent attempts, global suppliers quoted prices well above expectations, with Petrobangla purchasing two spot LNG cargoes from Vitol Asia Pte Ltd and BP Singapore Pte Ltd at $22.35 per million British thermal units (MMBtu) and $21.66 per MMBtu respectively.

The latest purchases cost around 34% more than Petrobangla's previous spot LNG procurement, which was valued at about $56 million for delivery during the July 26-27 window.

Market insiders attribute the higher prices to volatility in global energy markets and Bangladesh's downgraded sovereign credit outlook by S&P Global Ratings from stable to negative.