Bangladesh inks landmark deal with US firm to buy up to 5m tonnes of LNG annually

Highlights:

• Argent LNG signs deal with Bangladesh for supplying 5m tonnes of LNG annually
• This is the first major US LNG deal under the new Trump administration
• The firm might sell LNG to Bangladesh's Petrobangla in future
• The US is the largest exporter of LNG in the world

Bangladesh has signed a non-binding agreement with Argent LNG, which is developing a 25 million metric tonnes per annum (MTPA) LNG facility in Louisiana, US, to purchase up to 5 MTPA of liquefied natural gas (LNG), the company announced on Friday, reports Reuters.

This marks the first major US LNG supply deal since President Donald Trump assumed office on 20 January, reflecting industry confidence in the administration's pro-energy policies.

Since coming to power Trump has taken executive action to end the Department of Energy's pause on licences to export the super-chilled gas to countries that do not have free trade agreements with the United States, as he tries to increase US exports of LNG.

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The United States is already the largest exporter of LNG in the world and is expected to double its capacity by 2028, according to the US Energy Information Agency.

If the Argent LNG project in Port Fourchon is completed, its cargoes could be sold to Bangladesh's state-owned company Petrobangla, according to the agreement.

"This agreement not only ensures a reliable energy supply for Bangladesh's expanding industrial base but also strengthens our strategic partnership with the United States," said Chowdhury Ashik Mahmud Bin Harun, the executive chairman of the Bangladesh Investment Development Authority (Bida).

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In a Facebook post, Ashik said the deal was signed on Saturday.

"Our country is facing a severe gas crisis, which is significantly impacting industrial growth and employment. It's imperative that we find a long-term gas supply solution. While the Middle East has been a traditional source, the United States presents an interesting alternative," he wrote in the post.

"However, the importance of this decision extends beyond mere energy supply; it's crucial from an economic diplomacy standpoint. The Trump administration's approach was distinctively business-oriented, favouring direct action over verbose discussions," Ashik added. 

"For instance, Senator Bill Cassidy from Louisiana, upon hearing about the signing, embraced me enthusiastically! This signifies a warm reception and potential for strong bilateral relations.

"In future dealings with the Trump administration, we will be able to proudly say that Bangladesh was its first partner, aligning his [Trump's] 'America First' with our 'Bangladesh First'. Also, for us, Bangladesh's interest always comes first," he wrote. 

Bangladesh has been seeking long-term solutions to its energy demands and trying to move toward increased use of LNG. But the country is also price sensitive and in 2022, as LNG prices spiked due to Russia's invasion of Ukraine, it reverted to burning cheaper coal.