Bangladesh in talks with Aramco for MOU on energy cooperation, including LNG

Bangladesh's interim government is in talks with Saudi Aramco to sign a memorandum of understanding on cooperation in the energy sector, including LNG imports, Petrobangla Chairperson Rezanur Rahman told Platts, part of S&P Global Commodity Insights, Aug. 28.

State-run Petrobangla has already prepared a draft, which is being vetted by the Ministry of Law, Justice and Parliamentary Affairs, he said.

"We are eyeing to ink the MOU with Aramco soon to expedite cooperation in the energy sector between the two countries," he added.

Saudi Aramco could not be immediately reached for comment.

Aramco has shown interest in supplying LNG to Bangladesh under both long- and short-term agreements, as part of its expanding global export operations, Rahman said.

Through its trading arm Aramco Trading Co., the company has already been shortlisted as a potential LNG supplier to Bangladesh from the spot market and delivered a couple of spot LNG cargoes through a competitive bidding process so far, he added.

Aramco is initially interested in supplying LNG under a short-term sales and purchase agreement, he said.

If the proposed SPA moves forward, it would mark Aramco's formal entry into Bangladesh's LNG supply chain beyond occasional spot market trades.

"We want to import a similar volume of LNG as we have started importing from Oman's OQ Trading from August," he said.

Short-term supply

Bangladesh recently signed its first-ever short-term LNG supply agreement with Oman's OQ Trading, under which the country will import 17 LNG cargoes between August 2025 and December 2026. This includes five cargoes in 2025 and 12 in 2026, averaging one cargo per month.

OQ Trading has already delivered its first LNG cargo under the new short-term SPA.

The OQ Trading deal marks Bangladesh's debut in procuring LNG under a pricing formula linked to the Platts-assessed Japan Korea Marker, or JKM -- the benchmark index for LNG deliveries to Northeast Asia. Under this SPA, Bangladesh will pay a premium of 15 cents/MMBtu over the JKM price.

Although pricing details for the potential Aramco deal have not yet been finalized, Petrobangla officials indicated that it might follow a similar JKM-linked pricing structure.

The potential short-term imports from Aramco and existing supply from OQ Trading are expected to enhance the stability of gas supply during periods of peak demand -- such as summer and Ramadan -- and reduce dependence on the unpredictable spot market, market sources said.

Existing supply

At present, Bangladesh imports LNG from QatarEnergy LNG, formerly Qatargas, and OQ Trading under long-term contracts indexed to Brent crude prices. While these contracts ensure base supply, they lack flexibility in pricing and volume.

The short-term SPAs, by contrast, provide greater agility and cost-competitiveness, officials said. They also serve as a bridge before larger volumes from new long-term contracts begin flowing into the country.

Rupantarita Prakritik Gas Company Ltd., the state entity responsible for LNG procurement, typically purchases three to four spot cargoes each month, depending on market conditions. This number rises during high-demand periods.

According to Petrobangla estimates, Bangladesh plans to import around 52 spot LNG cargoes in 2025 -- the highest number for a single year.

Bangladesh has been rationing gas supply to industries, power plants and other gas-guzzling consumers to cope with the mounting natural gas demand.

The country's overall natural gas output – local gas and imported LNG combined -- was around 2.83 Bcf/d, including 1.05 Bcf/d of re-gasified LNG, against the demand for over 4 Bcf/d, according to official data as of Aug. 27.