Bangladesh approves 117 LNG cargoes from Gunvor as supply tightens

Bangladesh approved a 13-year deal to buy 117 LNG cargoes from US-based Gunvor, locking in supply as the Iran conflict disrupts Gulf exports and keeps the global market tight through 2028.

"Gunvor is taking the opportunity as very few companies in the world want to enter into long-term LNG deals now," a Petrobangla official told TBS.

The Cabinet Committee on Government Purchase approved the government-to-government agreement on 12 August, after returning it on 7 August over pricing. Gunvor will supply five cargoes in 2026, six in 2027 and three in 2028 at the Japan-Korea Marker plus $0.0875 per MMBtu, down from an initial JKM plus $0.875. From 2029 through 2038, it will deliver 10 cargoes a year at 121 percent of the US Henry Hub benchmark plus $5.20 per MMBtu.

The deal is part of a trade framework under which Bangladesh plans to import about $15 billion of US LNG over 15 years, as it races to replace volumes from QatarEnergy and Oman's OQ Trading, whose long-term contract expires in 2028.

Pricing reflects a seller's market

Gunvor initially proposed JKM plus $0.10 per MMBtu for 2026-28 and 122 percent of Henry Hub plus $5.35 for 2029-38. After negotiations, it cut the Henry Hub multiplier to 121 percent and the fixed premium to $5.20, but raised the JKM-linked price to $0.875 before Petrobangla won it back down to $0.0875.

Petrobangla and Energy Division officials said the higher JKM premium reflects a tight supply outlook for 2026-28, while the lower Henry Hub terms apply from 2029, when a wave of new LNG infrastructure is expected to ease prices. The 121 percent Henry Hub multiplier sits above the industry norm of about 115 percent, plus a liquefaction charge of roughly $5-$6 per MMBtu, officials said.

The terms compare with India's Gas Authority of India, which signed a five-year deal with QatarEnergy Trading in 2024 at 115 percent of Henry Hub plus $5.60, and Gujarat State Petroleum, which agreed to 119 percent plus $4.40 with TotalEnergies for a 10-year contract starting in 2026. Bangladesh's existing long-term contracts run cheaper: QatarEnergy supplies 1.8-2.5 million tonnes a year at $10.114 per MMBtu, while OQ Trading delivers 1-1.5 million tonnes at $9.444.

Supply uncertainty drives urgency

Bangladesh faces growing uncertainty over existing suppliers. QatarEnergy, its largest, has said it may deliver only about half of its contracted cargoes in 2026, when the country plans to import 115 cargoes. QatarEnergy was scheduled to supply 40, or 34.8 percent of planned imports, with OQ Trading due 16, QatarEnergy Trading 12, OQ Trading LLC four and Excelerate Gas Marketing 14.

Supply concerns deepened after the Iran-US conflict began on 28 February and disrupted shipping around the Strait of Hormuz. QatarEnergy declared force majeure on 2 March, OQ Trading on 5 March and Excelerate on 6 March. Although the strait has reopened, officials expect global LNG supplies to stay tight for three to five years as regional export capacity recovers slowly, forcing Bangladesh to lean on spot purchases at prices more than double pre-war levels.

Alongside Gunvor, the government approved eight spot cargoes: two from Hong Kong's Zhenyu Shipping at a fixed $14.95 per MMBtu, and six at JKM plus $0.54 from Blackcube International, Maxwell International and Global Fuel Supplies. Bangladesh is also weighing short-term supply from Australia, Indonesia, Nigeria and Algeria to diversify beyond Gulf producers.

This article is for informational purposes only and does not constitute investment advice.