Petrobangla Loosens Rules to Attract More Spot LNG Suppliers for Bangladesh

🛢 Dhaka, Bangladesh — Petrobangla has sharply eased the entry requirements for new spot liquefied natural gas (LNG) suppliers as Bangladesh seeks to widen its sourcing options amid severe gas shortages and rising global LNG prices.

📊 The state-run corporation will now allow companies to seek enlistment with just one successfully completed LNG supply contract and $50 million in financial capacity — a significant relaxation of the experience, financial and operational requirements introduced in March 2026.

📊 August Gas Supply at 2,235 mmcfd — Lowest in a Decade

📊 The move comes at a difficult time for the country’s LNG procurement:

• 🛢 Disruptions at its two floating LNG terminals (FSRUs)
• 🚢 Cargo delivery problems from contracted suppliers
• 🌏 Global supply squeeze driven by Middle East conflict
• 📊 Average gas supply in August at 2,235 mmcfd — the lowest August supply in a decade

📊 The government had to make emergency direct purchases of LNG as industries struggled with low gas pressure and power generation was hit by fuel shortages. Spot LNG prices have also risen sharply — Bangladesh last week approved a cargo at more than $28 per MMBtu, the highest price since 2022. Before the Middle East war disrupted global supplies, the country typically paid $10 to $12 per MMBtu for spot LNG.

📋 Key Changes: March Rules vs Revised Criteria

📊 Against this backdrop, Petrobangla issued a fresh international invitation on August 29 to enlist more suppliers under “revised criteria”. The changes are substantial:

📊 Experience requirements:

• ❌ March rules: At least 2 years of LNG supply experience + deliveries of at least 0.5 million tonnes in each of two of the previous five years
• ✅ Revised: Only one successfully completed LNG supply contract, with no minimum delivery volume

📊 Financial threshold:

• ❌ March rules: $100 million in net worth in two of the previous three fiscal years
• ✅ Revised: Cut to $50 million — can be met through liquid assets, working capital, credit facilities or bank solvency

📊 Operational requirements — now marked “Not Applicable”:

• ❌ Previously needed: Experience supplying LNG to FSRU-based terminals
• ❌ Previously needed: Ability to supply lean LNG containing at least 91 percent methane
• ❌ Previously needed: No failed LNG cargo deliveries in previous five years
• ❌ Previously needed: Own or charter an LNG carrier
• ❌ Previously needed: Arbitration history (no more than 3 awards against them in 5 years)

✅ All of the above are now “Not Applicable” under the revised criteria.

🤝 Joint Venture Requirements Also Eased

📊 Joint venture requirements have also been eased:

• 🤝 Lead partner now needs only one successfully completed LNG supply contract
• 💰 $50 million financial requirement can be shared — lead partner meets 75%, other partner(s) meet 25%

📊 The changes could bring LNG traders with shorter operating histories, lower financial capacity and no LNG carrier of their own or under charter into Petrobangla’s supplier pool.

💬 Petrobangla Director: “Looking for More Participants”

💬 However, Petrobangla has not explained why it relaxed requirements introduced only a few months ago.

💬 Petrobangla Director (operations and mines) Md Shoyeb, the contact person for the enlistment process, told The Daily Star that the changes aim to attract more suppliers.

💬 “We are looking for more participants in the spot market,” he said.

📋 Application Timeline

📊 Key dates for the new enlistment process:

• 📅 August 29: Fresh international invitation issued
• 📅 Today (7 September): virtual pre-application meeting with prospective suppliers
• 📅 September 15: applications due

📊 The exercise will not replace existing suppliers, and companies already enlisted for spot LNG supply do not need to apply again. Petrobangla currently has 30 companies on its latest spot LNG tender list. The new exercise could further expand a supplier pool that has grown significantly since the change of government in August 2024.

🌏 Strategic Context: Bangladesh LNG Crisis

📊 For Bangladesh’s energy security, the relaxed supplier criteria reflect the urgency of the current crisis:

• 🛢 Qatar LNG disruption — 60% of contracted supplies affected by Strait of Hormuz
• 💰 Spot market dependence — paying $28+/MMBtu vs $10-12 pre-crisis
• 🚢 6 spot cargoes for October — RPGCL already floated tenders
• 📊 Gas rationing — industries, power plants affected
• 📊 2,335 mmcfd supply vs 4,000 mmcfd demand — 42% deficit
• 🛢 Emergency direct purchases — government bypassing normal procurement

💰 Implications for Bangladesh Energy Market

📊 The relaxed criteria have both positive and potentially negative implications:

✅ Potential benefits:

• 📊 More suppliers — increased competition could lower spot prices
• 📊 Diversified sourcing — reduce dependence on Qatar
• 📊 Faster procurement — more suppliers means quicker cargo availability
• 📊 Market flexibility — smaller traders can participate

⚠ Potential risks:

• 📊 Supplier reliability — less experienced suppliers may fail to deliver
• 📊 Quality concerns — no methane content requirement
• 📊 Financial capacity — $50M threshold may be insufficient for large cargoes
• 📊 No carrier requirement — suppliers without logistics capacity may struggle
• 📊 No arbitration history — potentially unreliable suppliers could enter

✅ For Bangladesh’s broader energy strategy, the decision to relax supplier criteria underscores the desperation of the current situation. With August gas supply at the lowest level in a decade and spot LNG prices at record highs, Petrobangla has little choice but to cast a wider net for suppliers — accepting higher risk in exchange for potentially broader supply options.

🌏 For the industrial community — particularly ceramics, textiles, steel and fertiliser manufacturers who have been operating at reduced capacity due to gas rationing — the prospect of more LNG suppliers entering the market offers some hope of improved gas supply in the coming months. However, the fundamental challenge of high spot LNG prices ($28+/MMBtu) will persist unless Qatar resumes contracted deliveries or global energy prices ease — developments that are largely beyond Petrobangla’s control.