Bangladesh Secures 12-Year LNG Supply Deal with Gunvor Amid Market Volatility

Bangladesh approved a significant long-term liquefied natural gas (LNG) supply agreement with U.S.-based commodity trader Gunvor on Wednesday, securing 117 cargoes between 2026 and 2038. The government also greenlit the purchase of eight additional spot cargoes from various suppliers to ensure energy stability amid ongoing disruptions in global gas markets.

Long-Term Agreement Details

The state-to-state agreement with Gunvor establishes a phased delivery and a hybrid pricing structure linked to major global gas benchmarks. Deliveries are scheduled to begin with five cargoes in 2026, followed by six in 2027, and another six in 2028.

The contract's pricing is divided into two stages:

• Initial Phase (2026-2028): The first 14 cargoes—covering all of 2026, 2027, and three deliveries in 2028—will be priced against the Japan Korea Marker (JKM) index plus 8.75 cents per million British thermal units (mmBtu).
• Later Phase (2028-2038): The remaining cargoes, including three in 2028 and ten annually from 2029 through 2038, will be priced at 121% of the U.S. Henry Hub benchmark plus $5.20 per mmBtu.

Additional Spot Purchases

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To address more immediate needs, Bangladesh also approved the direct procurement of eight spot LNG cargoes. Hong Kong-based Zhenyu Shipping Company Limited will supply two of these cargoes at a fixed price of $14.95 per mmBtu.

The other six cargoes will be priced at the JKM index plus $0.54 per mmBtu. These will be supplied by three firms providing two cargoes each: UK-based Blackcube International Limited, Oman’s Maxwell International SPC, and Australia-based Global Fuel Supplies Pte Ltd.

Market Context

This series of agreements is a strategic move by Bangladesh to secure its energy supply chain as global LNG markets face significant uncertainty. According to the source material, recent disruptions include a force majeure declaration by QatarEnergy on some of its long-term contracts, which has impacted both production and established shipping routes.

By diversifying its suppliers and locking in both long-term and spot supplies with varied pricing mechanisms, Bangladesh aims to mitigate the impact of price volatility and potential supply shortages. The dual-benchmark approach in the Gunvor deal allows the country to balance exposure between Asian (JKM) and North American (Henry Hub) gas prices.