LNG: 13-year import deal secured with one US firm
The government is set to import Liquefied Natural Gas (LNG) from the US-based private entity Gunvor USA LLC for a duration of 13 years. A total of 78 cargoes of LNG will be imported under a government-to-government (G2G) framework. Based on current market valuations, this LNG deal is worth Tk 714.95 billion.
The firm will supply six cargoes of LNG per year. The imports from Gunvor USA LLC will commence in the current year, 2026, and run through to 2039.
The proposal received approval in principle yesterday, Tuesday, during a meeting of the Cabinet Committee on Economic Affairs held at the Secretariat in Dhaka, chaired by Minister for Finance and Planning, Amir Khasru Mahmud Chowdhury.
The finance minister did not brief the media following the meeting; however, the Ministry of Finance disclosed the approval via a press release.
Petrobangla, an agency under the Energy and Mineral Resources Division, is the implementing body for this procurement.
In the proposal submitted for approval in principle, the Energy and Mineral Resources Division stated that Petrobangla currently holds seven active agreements with five entities across the United States, Qatar, Oman, and Saudi Arabia. LNG is currently being imported under these short- and long-term contracts.
The government aims to ensure an uninterrupted gas supply to meet the country's existing and growing demand, which necessitates additional LNG imports. Consequently, LNG will be procured from Gunvor USA LLC on a G2G basis.
G2G agreements typically take place directly between governments, with no standard provision for entering a G2G contract with a private firm.
Virtually all commercial entities in the United States are privately owned, and Gunvor USA LLC is likewise a private corporation. This has raised questions regarding whether initiating a G2G LNG import deal with Gunvor USA LLC complies with legal standards.
When contacted, Minister for Power, Energy and Mineral Resources Iqbal Hassan Mahmood Tuku told Prothom Alo, “Gunvor may not be granted the full 13-year term immediately. Gunvor’s LNG vessels are scheduled to arrive starting two months from now, in September. We will evaluate their performance first before deciding whether to commit to the 13-year arrangement.”
“The LNG imports are being carried out pursuant to the trade agreement signed with the United States during the interim government's tenure, strictly adhering to the Public Procurement Rules (PPR). Had it infringed upon the PPR, we would not have proceeded with it,” the energy minister added.
A single cargo contains 3.36 million MMBtu (Million British Thermal Units) of LNG, which is equivalent to approximately 95 million cubic metres of natural gas.
At present, the global market price of LNG stands between US$21.5 and $22 per MMBtu. Calculated at $21 per MMBtu, the cost of a single cargo comes to over $70 million—equivalent to nearly TK9.17 billion. LNG prices routinely rise year on year.
Even under current rate estimations, the total cost for 78 cargoes reaches Tk714.95 billion (assuming an exchange rate of Tk124 per US Dollar).
The Bangladesh Public Procurement Authority (BPPA) attends these meetings to verify whether PPR guidelines are being complied with.
When asked for comment, BPPA Chief Executive Officer (CEO) Abu Sayed Md. Kamruzzaman told Prothom Alo over the phone on Tuesday that as he had assumed the position only that day, he was unable to offer an immediate statement.
However, former BPPA CEO (then Director General) Faruque Hossain remarked to Prothom Alo, “It remains unclear how a G2G arrangement can be executed between the Government of Bangladesh and a private US company like Gunvor USA LLC. If the US government designated or nominated Gunvor, that would be one matter. Whether that occurred in this instance, I do not know. If not, the structure of this G2G arrangement will be unviable and could invite future scrutiny.”
Faruque Hossain further noted that under the PPR 2025 regulations, the entity involved must be a government, a state-owned enterprise, or a government-nominated institution for a G2G transaction to be valid. It remains uncertain whether this condition has been met.