Written by The Banking Post
Bangladesh has inked its first-ever short-term liquefied natural gas (LNG) supply agreement with OQ Trading International of Oman in a move aimed at enhancing energy security and reducing reliance on the volatile spot market.
The Sales and Purchase Agreement (SPA), signed on Tuesday, will enable the country to import one LNG cargo per month between August 2025 and December 2026, totaling 17 cargoes. This marks the first instance of Bangladesh entering a short-term LNG deal with any global supplier.
Petrobangla Secretary Md Amzad Hossain signed the agreement on behalf of the state-run energy entity, while officials from OQ Trading and its local partner, Rupantarita Prakritik Gas Company Ltd (RPGCL), were present at the signing ceremony. Petrobangla Chairman Md Rezanur Rahman confirmed the development.
Under the terms of the agreement, Bangladesh will import five cargoes in 2025 and 12 in 2026. The supply will contribute to a more stable gas distribution network, particularly during periods of peak demand such as the summer months and Ramadan.
For the first time, Bangladesh will procure LNG indexed to the Japan Korea Marker (JKM) — the benchmark price for spot LNG deliveries in Northeast Asia — with a fixed premium of 15 cents per million British thermal units (MMBtu). This differs from existing long-term contracts, which are linked to Brent crude oil prices.
“Initial efforts to secure LNG under Brent-linked terms failed due to high price expectations from suppliers,” said Mr. Rahman. “The JKM-based pricing with a moderate premium proved to be a more viable option.”
Bangladesh currently imports LNG from QatarEnergy and OQ Trading under long-term Brent-indexed contracts. However, rising costs and payment uncertainty in the spot market have made short-term contracts an increasingly attractive alternative.
Petrobangla officials noted that the new deal would reduce the need for high-cost spot cargoes and serve as a bridge until larger volumes from existing long-term agreements begin to arrive.
RPGCL, which handles the country’s LNG imports, presently procures three to four spot cargoes monthly — a number that rises during high-demand periods. However, long validity periods in tender processes have often driven up premiums by 50 to 70 cents per MMBtu, and at times even $1.50 per MMBtu.
The new strip contract offers pricing predictability for Bangladesh and risk mitigation for the supplier, ensuring both sides are protected from spot market fluctuations and tender delays.
According to Petrobangla, Bangladesh plans to import around 52 spot cargoes in 2025, a record high for a single year.
In addition to this short-term agreement, the country has two long-term LNG deals with OQ Trading. The first, signed in May 2018, runs through 2029, allowing up to 1.5 million tonnes per year. The second, signed in June 2023, spans a 10-year period starting in 2026, with volumes ramping up from 250,000 tonnes in 2026 to 1.5 million tonnes annually from 2029 to 2035.
Since its first LNG delivery from OQ Trading in January 2019, Bangladesh has imported 124 cargoes — approximately 7.74 million tonnes — as of June 2025. All LNG import and trading activities are managed by RPGCL, a wholly owned subsidiary of Petrobangla.
