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Bangladesh ends talks with Trafigura

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World Fertilizer,


According to Reuters, Bangladesh has called off negotiations with Trafigura – the Switzerland-based commodity trader – to install a small floating LNG import terminal because of delays in agreeing terms.

Gunvor, meanwhile, a rival trader, is reportedly advancing with a separate project.

Reuters reports that Trafigura, Vitol and Gunvor were all looking to develop LNG import projects in Bangladesh, with AOT Energy already having provisionally agreed to supply the country with 1.25 million tpy of LNG for a 15-year period.

According to Reuters, an official at a state-run energy company said that Trafigura, which is reportedly also looking construct floating LNG import terminals in the UK and Pakistan, delayed agreeing terms to supply fertilizer producer Chittagong Urea Fertilizer Co. through the use of a floating terminal located on the Karnaphuli river.

A director at Petrobangla – the state-run energy firm – reportedly added: “We are not going ahead with Trafigura, we can’t wait for long for their response.”

Citing various industry sources and officials, Reuters also claims that Gunvor is proceeding with its own plans to set up a floating storage and regasification unit (FSRU) close to the project proposed by Trafigura.

Gunvor reportedly teamed up with Exmar – a Belgian shipping firm – on its Bangladesh project, which will be used to supply Karnaphuli Fertilizer Co. Earlier this month, Exmar announced that it has signed a 10-year charter with Gunvor for its 25 000 m3 capacity FSRU for Bangladesh. The barge was constructed by China-based Wison Offshore and Marine, and is scheduled to arrive in Bangladesh in 4Q18, with operations to start after its full commissioning.

Officials reportedly said that a draft deal between state officials and Gunvor was vetted by the law ministry and the government’s purchase committee. Vitol meanwhile, is also looking to implement a small scale FSRU alongside the older Sangu gas platform located in the Bay of Bengal, after being awarded the contract ahead of other international oil companies.

Reuters also reports that a provisional deal that will see AOT Energy provide Bangladesh with LNG for a 15-year period is also progressing well.

In March this year, Reuters claims that a senior official at Petrobangla went to Switzerland in order to verify AOT’s financial strength after senior executives left the trading firm amid losses in a number of trading operations, as well as a shrinking credit line. Following this meeting, Reuters reports that Petrobangla is now working on a final draft of a deal with AOT.

Officials reportedly stated that Bangladesh ensured more competitive LNG pricing with AOT when compared to its contract with Qatar. Under the terms of its deal with Qatar (2.5 million tpy for 15 years), Bangladesh agreed to pay 12.65% of the three-month average price of Brent oil plus a constant of US$0.50/million Btu.

In addition to this, Reuters claims that Bangladesh also has a deal with Oman Trading International for imports of 1 million tpy of LNG over a 10-year period.

That LNG will reportedly be priced at 11.9% of the three-month average price of Brent plus US$0.40/million Btu constant.

Read the article online at: https://www.worldfertilizer.com/project-news/17052018/bangladesh-ends-talks-with-trafigura/

 

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