Story
Bangladesh Secures 12-Year LNG Supply Deal with Gunvor Amid Market Volatility
Summary
Bangladesh has approved a long-term deal with U.S.-based Gunvor for 117 LNG cargoes through 2038 and secured additional spot purchases to bolster its energy security amid global 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
AdTo 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.
Read next
More on Commodities
Wheat Futures Decline on Technical Selling as Crude Oil Weakens
Chicago wheat futures edged lower on Wednesday, pressured by technical selling linked to a downturn in crude oil prices, though losses were limited by ongoing global supply concerns.
Raw Sugar Futures Slip as Declining Oil Prices Weigh on Ethanol Demand
Raw sugar futures edged lower as a drop in crude oil prices made ethanol production less profitable, incentivizing mills to produce more sugar. However, prices found support from forecasts of lower crop yields in key producing regions.
Continental Resources Signs MOU with Venezuela's PDVSA to Develop Orinoco Oil Field
U.S.-based Continental Resources has entered a preliminary agreement with Venezuela's state-owned oil company, PDVSA, to jointly develop a block in the Orinoco Heavy Oil Belt estimated to hold 30 billion barrels of oil.
Soybean Futures Rise on Hopes for U.S.-China Trade Talks
CBOT soybean futures closed higher Wednesday, supported by news of a planned meeting between top U.S. and Chinese officials which has raised expectations for stronger export demand.