Sep 25, 2024
| M Azizur Rahman | The Financial Express
The interim government's move to purchase liquefied natural gas (LNG) from the spot market faced a setback as the bids offered fell short of minimum requirement under the Public Procurement Rules (PPR) 2008.
The authorities concerned received two bids each in response to two tenders floated to import two LNG cargoes from the spot market, but the PPR requires at least three bidders to evaluate the bid documents, officials said.
The authorities couldn't even evaluate the bids after floating 'limited tendering', they said.
Gunvor Singapore Ltd, Vitol Asia Pte Ltd and Excelerate Energy LP had submitted the bids alternatively to make both the tender's participating companies to two, a senior RPGCL official told the FE Wednesday.
State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) has to re-tender to purchase the two LNG cargoes from the spot market and float a fresh tender to buy a total of three spot cargoes for October deliveries, he said.
Earlier, the RPGCL would follow the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 (Amended 2021) to select the successful bidders, the official said, adding that there was no mandatory provision of minimum participation to get the bids evaluated under the special power and energy law.
He said the RPGCL could then evaluate and award tender to even a single company under the special law.
Officials said after assuming office, the interim government decided to follow the PPR-2008, allowing competition among selective bidders, instead of the special law.
The tender formal, however, remains same as earlier, with the tenders being done on a fixed price basis and offers goes to 23 previously short-listed global LNG suppliers.
But the bid submission time has been extended to seven days from the previous three days under the new tendering method.
Officials said the RPGCL had floated tenders for spot LNG deliveries in the first week of October after a hiatus of around four months, as Summit LNG Terminal was offline.
The RPGCL official said the bid winners may deliver the LNG cargoes at Moheshkhali island with option to discharge the cargoes at either of the country's two floating storage regasification units (FSRUs).
The RPGCL, a wholly owned subsidiary of state-run Bangladesh Oil, Gas, and Mineral Corporation, known as Petrobangla, floated the latest tenders on September 23 and the bid closing date is September 29.
Bangladesh previously awarded its latest spot LNG tender to Total Energies Gas and Power Ltd for July 24-25 delivery cargo at US$12.58 per million British Thermal unit (MMBtu).
"The interim government will have to include more interested spot LNG suppliers in its short list to ensure larger participation," energy expert professor M Tamim told the FE.
It is very sad that although 23 companies are short-listed, very few are taking part in the bids, he said, posing a question: "Does it prove that the previous listing was made on political considerations?" Market insiders said Bangladesh had stopped issuing LNG tenders for spot purchases after the first week of July as Summit Group's FSRU was taken offline at the end of May.
The demand for LNG cargoes had almost muted from mid-July to the first week of August because of student-led public movement in Bangladesh.
The demand, however, recovered afterwards and power load-shedding is still frequent as inventory was not sufficient to meet the requirements.