Bangladesh is going to import liquefied natural gas (LNG) from Malaysia as the Cabinet Committee on Economic Affairs approved in principle a proposal of the state-owned Petrobangla in this regard.

“Malaysian company Perintis Akal Sdn Bhd will supply the LNG on a long term basis and Petrobangla will buy it under the Speedy Supply of Power and Energy (Special) Act 2010,” said Sayed Mahbub Khan, additional secretary of the Cabinet Division, while briefing on the outcomes of the meeting.

Finance Minister AHM Mustafa Kamal presided over the meeting held virtually, also attended by State Minister for Power, Energy and Mineral Resources Nasrul Hamid.  

However, no detail was disclosed about the proposal, placed by the Energy and Mineral Resources Division on behalf of Petrobangla, the oil gas and mineral corporation of Bangladesh.

The proposal will be placed in the meeting of the Cabinet Committee on Government Purchase for a final approval, sources said.

Read: Bangladesh sets $72 billion export target with 11.52% growth for FY 2023-24

With this new proposal, Bangladesh has chosen Malaysia as the third country to import LNG from on a long term basis.

Bangladesh has been importing LNG from Qatar and Oman since 2018 after setting up of two FSRU (floating storage and re-gasification unit) known as LNG terminals at Moheshkhali in Cox’s Bazar.

In addition, Bangladesh imports LNG from the international spot market as well to meet its growing demands.

Meanwhile, a top official of the Petrobangla said that the Malaysian company will annually supply 1 MTPA (million tonnes per annum) under a 15-year contract.

Read: RMG exports to EU grew 9.93% in FY 2022-23: Export Promotion Bureau

“But we can disclose the details of the proposal after it receives final approval of the cabinet committee,” the official told UNB on condition of anonymity.

Besides the existing deals, Bangladesh signed a new deal on June 1 with Qatar to get an additional 1.5 million tons per annum (MTPA) of LNG for the next 15 years from 2026, while another agreement was signed with Oman on June 20 to import more LNG from the Middle-Eastern country.

As per the new agreement, the OQT, the Omani state-owned company, will supply LNG 0.25-1.5 million metric ton per annum (MTPA) to Bangladesh over 10 years from 2026.

However, no prices or financial details of the deal were disclosed in the function. 

Bangladesh has been desperately looking to increase its import of LNG under a long-term agreement to sustain the volatility due to the frequent price fluctuation in the global energy market.

Read: We are strengthening armed forces to protect independence, not for war: PM Hasina

As part of the move, the Malaysian company has been chosen to supply the LNG.

The country's total natural gas production is about 3000 million cubic feet per day (MMCFD) against a demand of 4000 MMCFD leaving a shortfall of about 1000 MMCFD. Of the total production, 700 MMCFD is imported while the country locally produces 2300 MMCFD gas.