The government of Bangladesh has entered into a new 15-year long-term liquefied natural gas (LNG) supply agreement with Summit Group, set to commence in January 2026.

The contract, facilitated through Petrobangla, the state-owned oil, gas, and mineral corporation, ensures the LNG supply of approximately 1.5 million tonnes per annum (MTPA).

In addition to the supply contract, a separate agreement was signed to construct a new floating storage and regasification unit (FSRU) with a capacity of 4.5 MTPA. This privately-owned FSRU will be Summit Group’s second such facility, strategically positioned near their existing unit at Moheshkhali Island in the Bay of Bengal. This development marks Bangladesh’s third FSRU.

Muhammed Aziz Khan, Summit Group’s Chairman, expressed pride and commitment regarding this significant venture. “It’s a great honour and responsibility to support Bangladesh’s energy infrastructure. With these investments, our total investment in the country will surpass Tk 320 billion ($3.0 billion) across power, energy, ports, and telecommunications sectors,” Khan stated.

The agreements were concluded following the approval from the Cabinet Committee on Government Purchase on December 6, 2023, which authorized the contract for Summit to build the additional FSRU. Summit subsidiary, Summit Oil & Shipping Company Ltd (SOSCL), is set to supply the LNG under the long-term agreement starting in 2026. The pricing mechanism for LNG pegged at approximately 13 percent of the average Brent crude price over the preceding three months.

This latest agreement is part of Petrobangla’s broader strategy to secure long-term LNG supplies. Since June 2023, Petrobangla has finalized four new sales and purchase agreements (SPAs) with various international suppliers, including Qatar Energy Trading LLC, OQ Trading Ltd of Oman, and Excelerate Gas Marketing Ltd Partnership of the USA. These agreements aim to enhance Bangladesh’s energy security and meet the increasing demand for natural gas.

Currently, Qatargas and OQ Trading are the primary suppliers under existing long-term contracts. The new contracts, including the one with Summit, are expected to start deliveries from 2026 onwards, further stabilizing the supply chain.

Summit’s new FSRU, Summit LNG Terminal II Ltd, will feature a storage capacity of 170,000 cubic meters and a send-out capacity of 600 million cubic feet per day (mmcfd). The company’s first FSRU, with a capacity of 3.75 MTPA, began operations on April 30, 2019, and is slated to remain operational until 2033.

However, Summit’s existing FSRU operations have been temporarily halted since May 30 due to damage caused by a stray pontoon during cyclone Remal. The ballast water tank was specifically impacted, leading to a suspension of services. In the interim, Excelerate Energy’s FSRU, Excellence, has been compensating by regasifying LNG beyond its official capacity of 600 mmcfd to meet the country’s immediate gas demand.

In a separate initiative, Summit Group is also planning to establish Bangladesh’s first onshore LNG terminal at Matarbari Island on a build-own-operate-and-transfer (BOOT) basis. Summit Corporation Ltd, another subsidiary of Summit Group, has partnered with JERA and Mitsubishi Corporation and has been shortlisted among eight consortiums to develop this 7.50 MTPA land-based LNG terminal.