Petrobangla Halves Net Worth Requirement to $50 Million for Spot LNG Suppliers

Petrobangla has slashed its financial and experience thresholds for spot liquefied natural gas suppliers, halving the required net worth to $50 million to ease severe national fuel shortages.

The state-run energy company now demands just one completed supply contract with no minimum cargo volume, dropping a previous rule requiring 0.5 million tonnes delivered across two separate years.

Lower barriers for commodity traders

Under the revised criteria issued on August 29, Petrobangla eliminated requirements for suppliers to own or charter an LNG vessel, prove experience with floating storage and regasification units, or guarantee lean gas containing at least 91 percent methane. Applicants no longer need to verify an absence of failed cargo deliveries over the past five years or limit their arbitration losses to three awards. For joint ventures, the lead partner must cover 75 percent of the $50 million financial capacity, while partners supply the remaining 25 percent.

“We are looking for more participants in the spot market,” Petrobangla Director for operations and mines Md Shoyeb said.

Pressure on industrial output

For industrial manufacturers and export supply chains across South Asia, reliable gas flow dictates factory uptime and power tariffs. Bangladesh faced severe disruption in August when average gas deliveries dropped to 2,235 million cubic feet per day against official demand of 3,860 million cubic feet per day, the lowest August supply figure in a decade. Terminal outages and global supply bottlenecks forced emergency spot purchases at more than $28 per million British thermal units, up sharply from historical norms of $10 to $12 per MMBtu.

Lowering entry barriers allows smaller trading houses without dedicated fleets to bid against established multinational commodity merchants. The tradeoff sits squarely in operational risk: by waiving past delivery guarantees and vessel charter proofs, Petrobangla accepts higher exposure to cargo defaults and scheduling failures when spot vessel availability tightens.

Procurement shift since 2024

The revised criteria follow a governance overhaul that suspended the Quick Enhancement of Electricity and Energy Supply Act, which previously allowed direct, non-tender contracts. The interim administration shifted spot purchases under the Public Procurement Rules 2025, expanding the active spot tender roster to 30 companies from an earlier pool where purchases were concentrated among five suppliers.

Applications for the new supplier pool close on September 15.