Bangladesh's Petrobangla and Summit close to signing 1.5 mil mt/year LNG deal

Bangladesh's state-owned Petrobangla is close to finalizing a new 15-year long-term LNG supply contract with privately owned Summit Group for around 1.5 million mt/year of LNG starting from January 2026, the heads of both companies told S&P Global Commodity Insights.

State-owned Petrobangla has completed negotiations with Summit Group and a sales and purchase agreement, or SPA, will be inked soon, Petrobangla chairman Zanendra Nath Sarker said, adding that the new SPA will be Bangladesh's sixth long-term LNG import contract and the fourth one to be signed since June 2023.

"Petrobangla intends to ink two deals with Summit at one go. Another deal will be inked for a floating storage and regasification unit, or FSRU, to be built by Summit," Sarker said.

He said on Dec. 6, 2023, Bangladesh's cabinet committee on government purchase approved Petrobangla's proposal to award Summit Group with a contract to build a second FSRU near its existing FSRU at Moheshkhali island in Cox's Bazar district in the Bay of Bengal.

"We are in talks with the Bangladesh government for supply of LNG under a long-term arrangement," Summit Group chairman Muhammed Aziz Khan confirmed separately. "Hopefully we will be able to supply around 1.5 million mt/year of LNG to Bangladesh from 2026 and onward," he said.

Both Petrobangla and Summit Group did not disclose the price levels of the deals.

Regarding the new FSRU, Khan said Summit was very happy to have initiated an agreement with Petrobangla for a 170,000-cu m FSRU with 600,000 Mcf/d send out capacity.

"These deals and their executions will hugely support Bangladesh's energy security as well as the country's economic growth," Khan added.

Onshore terminal

Summit Group is also looking to build Bangladesh's first onshore LNG terminal on a build, own, operate and transfer (BOOT) basis at Matarbari island on the Bay of Bengal, Khan said.

Summit Corp. Ltd., a subsidiary of Summit Group, has teamed up with Japan's gas and power utility JERA and Mitsubishi Corp, and been shortlisted along with seven other consortiums to build the 7.50 million mt/year land-based LNG terminal, Khan added.

Summit Group's existing 3.75 million mt/year capacity FSRU, located at Moheshkhali island, started commercial operation on April 30, 2019, and will be operational for 15 years until 2033. The FSRU is currently on a 45-day scheduled maintenance.

Summit's second 4.5 million mt/year capacity FSRU will also be leased for 15 years, Khan said. He added that JERA is likely to be a part of Summit's LNG supply business, referring to its long-term LNG SPA, but did not elaborate.

Bangladesh inked its fifth long-term LNG SPA with Houston-based Excelerate Energy on Nov. 8, 2023. Excelerate, which currently supplies LNG to Bangladesh from the spot market, will supply up to 1 million mt/year of LNG for 15 years starting 2026.

On Jan. 29, QatarEnergy and Excelerate Energy said in a joint statement that they had signed a long-term LNG deal for up to 1 million mt/year of supply starting in January 2026.

On June 1, 2023, Bangladesh signed a long-term SPA with QatarEnergy to buy up to 1.8 million mt/year of LNG for 15 years starting January 2026, and on June 19, 2023, the South Asian country signed an SPA with OQ Trading for up to 1.5 million mt/year of LNG for 10 years starting 2026.

Bangladesh currently imports LNG from QatarEnergy and OQ Trading under long-term LNG supply deals.