Petrobangla gets approval to sign two long-term LNG deals
The Bangladesh government has granted approval to state energy company Petrobangla for two separate long-term LNG purchase agreements, as reported by the national news agency Bangladesh Sangbad Sangstha on August 9.
Under the auspices of the Cabinet Committee on Economic Affairs (CCEA), Petrobangla has been given the green light to engage in the procurement of LNG through two distinct deals. The first deal allows Petrobangla to purchase 1.5mn tonnes/year of LNG from Summit Oil and Shipping Company, with the 15-year agreement scheduled to commence in 2026.
Similarly, Petrobangla has been authorised to enter into a second agreement to procure 1-1.5mn t/yr of LNG from Excelerate Energy. This second 15-year deal is also set to begin in 2026.
These LNG purchase agreements come in response to Bangladesh's ongoing struggle with a gas shortage that has had adverse effects on power generation and industrial activities. Challenges arising from the depreciation of the local currency against the US dollar have compounded the government's ability to finance LNG imports. In the face of elevated global gas prices, the country was compelled to implement gas rationing measures last year.
Amidst the backdrop of declining global gas prices, Bangladesh has undertaken efforts to secure fresh long-term agreements. It recently signed a long-term LNG deal with QatarEnergy Trading, the LNG trading arm of QatarEnergy. In June, Bangladesh signed a deal with Oman.
Bangladesh already has existing LNG import deals with Oman Trading International and Qatargas. The country has two floating LNG terminals, each with a capacity of 500 million ft3/day, located in Maheshkhali. One of these terminals is operated by Summit, while the other is managed by Excelerate Energy.
Summit has received approval from the Bangladesh government to establish its second and country’s third floating LNG import terminal in Cox's Bazar.