Another deal inked with Oman to increase LNG import

Bangladesh has signed a new Sale and Purchase Agreement (SPA) with Oman to start importing an additional 0.25 million to 1.5 million tonnes of liquefied natural gas (LNG) for ten years from 2026.

Petrobangla, Bangladesh's state-owned gas company, signed the deal with Oman Trading International, currently known as OQ Trading Limited (OQT), at an event in a city hotel on Monday. Under the new deal, from January 2026, Oman will annually supply an additional 0.25 million to 1.5 million tonnes of LNG per annum on a long-term basis till 2035.

At the event, Petrobangla company secretary Ruchira Islam and Said Al Maawali, executive director of OQT, signed the agreement. 

Monday's event was also attended by Dr Tawfiq-e-Elahi Chowdhury, power, energy and mineral resources affairs adviser to the prime minister, Dr Md Khairuzzaman Mozumder, secretary of the Energy and Mineral Resources Division, and Petrobangla Chairman Zanendra Nath Sarkar.

Bangladesh already has two long-term LNG deals – one with Qatar for 2.5 million tonnes per annum, and another with Oman's OQ Trading for 1.5 million tonnes per annum.

The country also has been importing LNG from the spot market since 2020.

Last year, Bangladesh imported a total of around 4.43 million tonnes of LNG from Qatar, Oman and the spot market.
It was 5.08 million tonnes in 2021.

With the new contracts, the country's long-term import capacity is expected to reach 7.3 million per annum by 2026.

At present, the country has a gas demand of 3,500 million cubic feet (mmcf) per day while the supply is 3,000mmcf. Of the total supply, 750mmcf to 800mmcf comes from LNG imports and the rest from local gas fields.

Petrobangla projected that the daily demand would reach 4,000mmcf by 2026 and contribution from LNG imports would cross 1,500mmcf.

Bangladesh relies on imported LNG for nearly three-quarters of its power generation.

High gas prices last year following Russia's invasion of Ukraine forced Bangladesh to curb spot LNG imports and ration gas supplies, driving down power output despite a rise in demand and leading to frequent power cuts.

In 2022, Bangladesh's LNG imports fell 13% from the previous year to 4.43 million tonnes, according to data firm Kpler.

This year, however, as Asian spot LNG prices eased from record highs, Bangladesh has returned to the spot market to beef up supplies. 

The Petrobangla chairman said in April the company was "making all efforts to ensure energy supplies to keep the economy running" as prices softened.