Excelerate begins LNG supply under long-term deal

US-based Excelerate Energy has commenced long-term liquefied natural gas (LNG) supply to Bangladesh under a 15-year sales and purchase agreement (SPA).

This marks a significant step in diversifying the country's energy imports beyond its traditional Middle-Eastern suppliers.

The first cargo under the agreement, carrying around 138,000 cubic metres of LNG, recently arrived at the Moheshkhali floating storage and regasification unit (FSRU), helping ease gas shortages affecting industries, power plants and other consumers.

The cargo reached the Moheshkhali FSRU and was successfully delivered a couple of weeks ago, a senior official of Petrobangla told The Financial Express on Monday.

With this shipment, Bangladesh has begun long-term LNG sourcing from outside the Middle East. Previously, the country imported LNG under long-term contracts from QatarEnergy of Qatar and OQ Trading International of Oman.

Petrobangla and Excelerate Energy signed the SPA on November 8, 2023. Under the deal, Excelerate will supply between 0.85 million tonnes per annum (Mtpa) and 1.0 Mtpa of LNG over a 15-year period beginning in 2026.

The company will deliver 0.85 Mtpa in 2026 and 2027, increasing supplies to 1.0 Mtpa annually from 2028 through 2040. This equates to 12 LNG cargoes each in 2026 and 2027, and 16 cargoes per year from 2028 onwards, the Petrobangla official said.

To secure LNG for Bangladesh, Excelerate Energy signed a separate agreement with QatarEnergy on January 29, 2024.

Under the pricing formula, Petrobangla will purchase LNG at approximately 13.35 per cent of the three-month average Brent crude oil price, plus a fixed premium of US$0.30 per million British thermal units (MMBtu), the official added.

Excelerate Energy has previously supplied several LNG cargoes to Petrobangla from the spot market, according to a senior official of Rupantarita Prakritik Gas Company Ltd (RPGCL).

In addition to the long-term SPA, Petrobangla signed another agreement with Excelerate in November 2023 to expand the Moheshkhali Floating LNG (MLNG) terminal, the RPGCL official said.

Excelerate has since increased the MLNG terminal's send-out capacity by 20 per cent to 600 million cubic feet per day (mmcfd), up from 500 mmcfd. The US firm currently owns both operational FSRUs in Bangladesh, with a combined regasification capacity of around 1,100 mmcfd.

Besides operating the MLNG terminal, it also provides an FSRU to Summit LNG Terminal Company Ltd, owned by Summit Group, under a 15-year charter agreement.

Bangladesh began importing LNG in August 2018 to address mounting natural gas shortages.

The country now procures LNG under both long- and short-term SPAs from multiple suppliers, while also sourcing cargoes from the spot market to meet rising demand, RPGCL officials said.

Since LNG imports commenced in 2018, Bangladesh has received approximately 35.39 million tonnes of LNG through 571 cargoes as of January 2026, according to RPGCL data.

Bangladesh's total natural gas output currently stands at around 2,653 mmcfd, including 941 mmcfd of regasified LNG, according to Petrobangla data as of February 22.

Azizjst@yahoo.com