Bangladesh Drops Trafigura In LNG Talks As Gunvor Advances



Reuters

DHAKA/LONDON, May 15 (Reuters) - Bangladesh has terminated talks with Swiss-based commodity trader Trafigura to install a small floating liquefied natural gas (LNG) import terminal due to delays in agreeing terms, while rival trader Gunvor advances with a separate project.

Once considered an energy backwater, Bangladesh's LNG demand is set to hit 17.5 million tonnes annually by 2025 after importing its first cargo last month, and as traders target Southeast Asia's booming gas markets to boost sales.

Swiss-based commodity traders Trafigura, Vitol and Gunvor were all pursuing LNG import projects in Bangladesh, and smaller peer AOT Energy has provisionally agreed to supply the country with 1.25 million tonnes annually for 15 years.

Trafigura, which also aims to build floating LNG import terminals in Pakistan and Britain, delayed agreeing terms to supply fertiliser producer Chittagong Urea Fertilizer Co. via a floating import facility on the Karnaphuli river, an official at a state-run energy firm said.

"We are not going ahead with Trafigura, we can't wait for long for their response," a director at state-run energy firm Petrobangla's LNG division told Reuters.

Trafigura declined to comment.

By contrast, rival trader Gunvor is moving forward with plans to set up a floating storage and regasification unit (FSRU) barge a stone's throw from Trafigura's proposed project, officials and industry sources said.

Gunvor partnered with Belgium shipping firm Exmar on its Bangladesh venture, which will supply the Karnaphuli Fertilizer Company.

Exmar announced on Monday it executed a 10-year charter with Gunvor for its 25,000-cubic-metre-capacity FSRU barge for Bangladesh.

The barge, built by China's Wison Offshore and Marine, is due to arrive in Bangladesh in the fourth-quarter this year and start operations after its full commissioning, Exmar said.

A draft of a deal between Gunvor and state officials was vetted by the law ministry and the government's purchase committee, officials said.

Trader Vitol, meanwhile, is pushing to develop a small-scale FSRU alongside the ageing Sangu gas platform in the Bay of Bengal, after beating international oil companies, including Exxon Mobil, to the contract.

A provisional deal under which AOT Energy will supply Bangladesh with LNG for 15 years is also moving closer to reality.

In March a senior Petrobangla official travelled to Switzerland to verify AOT Energy's financial strength after senior executives left the trading firm amid a shrinking credit line and losses in some trading operations.


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