Bangladesh Secures Long-Term LNG Supply Deal with Gunvor Amid Market Volatility

Bangladesh's government on Wednesday approved a long-term supply agreement for liquefied natural gas (LNG) with U.S.-based energy trader Gunvor. The deal is aimed at securing energy supplies for the South Asian nation as it navigates persistent volatility in the global gas market.

Details of the Gunvor Agreement

The government-to-government agreement covers the delivery of 117 LNG cargoes between 2026 and 2038. The supply schedule will ramp up over the initial years, with 5 cargoes slated for 2026, followed by 6 cargoes in 2027 and another 6 in 2028.

The contract features a hybrid pricing structure linked to two major global benchmarks:

• 2026-2028: The initial cargoes (all of 2026-2027 and three in 2028) will be priced against the Japan-Korea Marker (JKM) benchmark, with a premium of $0.0875 per million British thermal units (mmBtu).
• 2028-2038: The remaining cargoes from 2028 onward will be priced at 121% of the U.S. Henry Hub benchmark, plus a fixed fee of $5.20 per mmBtu.

Additional Spot Cargo Purchases

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In a separate move, the Bangladeshi government also approved the direct procurement of an additional eight LNG cargoes to meet more immediate needs. These purchases involve several international suppliers and varied pricing terms.

Two cargoes will be supplied by Hong Kong-based Zhenyu Shipping Company Limited at a fixed price of $14.95 per mmBtu. The remaining six cargoes will be priced at the JKM index plus $0.54 per mmBtu. These will be supplied in pairs by UK-based Blackcube International Limited, Oman's Maxwell International SPC, and Australia's Global Fuel Supplies Pte Ltd., with the cargoes sourced via Malaysia's Plentitude Energy Sdn Bhd.

Market Context

This series of agreements comes as energy-importing nations seek to lock in long-term supplies to hedge against price shocks and supply disruptions. The global LNG market has faced uncertainty, highlighted by recent issues such as QatarEnergy's declaration of force majeure on some long-term contracts, which has impacted production and shipping routes.

For Bangladesh, diversifying its LNG sourcing portfolio with contracts linked to both Asian (JKM) and U.S. (Henry Hub) benchmarks is a strategic effort to mitigate price risk and ensure a stable supply for its growing economy.