For ensuring availability of fossil fuel to the country’s energy-starving manufacturing sector by supply LNG to the national grid, the government of Bangladesh is going to procure liquefied natural gas from Swiss company AOT Energy.
The process of procuring LNG from a third sourcing country after Qatar and Oman is at the final stage and the proposal is waiting to be sent to cabinet purchase committee by State Minister for Energy and Mineral Resources Nasrul Hamid, ministry sources said.
The ministry is also looking for some more LNG suppliers from Indonesia, USA and other sources as what Nasrul Hamid said the introduction of LNG would create huge opportunities for factories whose production has long been affected due to lack of adequate energy supply.
AOT Energy, a world-renowned Swiss company formerly known as Astra Transcore Energy, proposed to supply LNG in a very competitive price with a most favourable payment terms, it added.
“The Ministry of Power, Energy and Mineral Resources is going to take another distinctive step to procure quality energy for the country,” an official of the ministry said appreciating the decision as a timely and dynamic move.
As per the Swiss proposal, the government of Bangladesh will enjoy one-month extra time for international payment, which will be highly beneficial to the country, a concerned official said.
Highly-placed sources at the ministry and the concerned government officials claimed that the upcoming decision will help not only to getting best LNG supply for the industrial development but also to enhancing the bilateral trade relationship between Bangladesh and Switzerland.
The government of Switzerland is much encouraged to witness new business engagements with Swiss company, including but not limited to, AOT Energy.
A six-member high-level Bangladesh delegation has already visited the AOT sites in Switzerland prior to their positive recommendation about AOT’s experiences and financial capabilities.
The team led by Towhid Khan, director, Finance of Petrobangla comprised of Md. Khalilur Rahman, DG, Admin of Prime Minister’s Office, Sayed Ahmed, joint secretary, Ministry of Law, Kazi M. Anwarul Azim, DGM, RPGCL, Zanendra Nath Sarkar, joint secretary, EMRD and a representative from National Board of Revenue (NBR).
This inter-organisational team visited AOT headquarters in March 2018 and reported in a very affirmative outlook based on verifiable facts including the long trading and shipping experiences, financial capabilities of the Swiss company, a concerned source has confirmed.
Abul Mansur Md Faizullah, chairman, Petrobangla sent a letter to the secretary for Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources in late April this year in this connection.
The team has found AOT as experienced in LNG management, scheduling and trading and ship-to-ship LNG supply, Mansur mentioned in his letter, a reliable source said.
Once finalised, AOT Energy will be third company to supplying world-standard LNG to both the Floating LNG Terminals (FSRU) developed by Excelerate Energy Bangladesh Limited (EEBL) and Summit Corporation Limited.
The government was committed to start imported LNG supply to the national grid within the year 2018 to meet pent up demand for fuel in the country. Accordingly, the first shipment arrived late April this year which carried 133,000 cubic metres of LNG from Qatar.
After receiving the first contingent at a programme in Dhaka, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said that the government has a robust plan for LNG procurement. “We want to go big in LNG because the financing is available. LNG is technologically better, as the cleaner energy needs less land,” he said at a seminar held early May. Initially the ministry signed a non-binding MoU with AOT Trading AG in mid-June 2017 and continued their discussions and negotiations with them.
Later in September 2017, state minister Nasrul Hamid sent the summary report for approval to the Minister of the ministry of Power, Energy and Mineral Resources (Prime Minister herself) after vetting it under Quick Enhancement of Electricity and Energy Supply Act-2010. Subsequently, the prime minister approved the summary report in October 2017. Upon initializing SPA (sales purchase agreement) in January 30, 2018 by both AOT and Petrobangla, the ministry is almost in the brink of finalizing SPA as a third supplying entity, in addition to Rasgas of Qatar and Oman Trading of Sultanate of Oman, the sources said.
According to reliable sources, while welcoming the Bangladeshi delegation to Switzerland, Swiss Minister Matthias Michelsen, mentioned that AOT is considered as a leading energy company in Switzerland and is known as a reputable and reliable company within Zug, Switzerland and abroad.
Switzerland focuses on long-term partnerships, also politically within the country as explained by Minister Michelsen. Matthias also referenced the visit of the Swiss President to Bangladesh and the support from the SECO (State Secretariat for Economic Affairs). The President of Switzerland also contributed to the Rohingya crisis during the official visit and AOT was attending as part of the official programme.
Mentionable, AOT has been supporting the development of LNG in Bangladesh since 2010. AOT Energy was the lead member of the Astra Oil-Excelerate consortium that successfully won the government tender to supply the first LNG FSRU terminal to Bangladesh in 2013. This terminal has recently commenced operations in Moheshkhali Island.
AOT, established in 1947, has had a global representation through their offices in Singapore and Houston, is known to be highly connected to its government for supporting it with quality services in the field of energy. It has also brought goodwill for the country through international trading.
“AOT is looking forward to becoming a key LNG supply partner for Bangladesh in the near future and to assisting with the energy security of the country by bringing competitive and flexible LNG supplies,” says James O’ Brien, Head of LNG Division, AOT Energy.
Apart from the two FSRUs of 500 MSCFD capacity, the government is keen to establish three more land-based LNG terminals at Maheshkhali and Kutubdia in Cox’sbazar and Paira Port in Patuakhali. For this the feasibility study is under process, a ministry source said.