(Bloomberg) -- Qatar is offering shorter and cheaper liquefied natural gas contracts as it attempts to secure customers for supply from expansion projects amid rising competition with the US.
A deal agreed last week between the world’s top LNG exporter and Bangladesh included more lenient payment deadlines than typically offered, according to people with knowledge of the matter.
The supplier is aiming to be more accommodating of the needs of customers, particularly emerging nations in Asia, that struggle with high energy costs or are unable to commit to long-term agreements, said the people, who spoke on condition of anonymity as the details are private.
QatarEnergy, which signed the deal with Bangladesh, didn’t respond to a request for comment. Bangladesh’s power and energy ministry didn’t immediately respond to requests for comment.
The nation is building the world’s biggest LNG expansion project, which aims to boost output by more than 60% through 2027, but has so far only signed long-term deals for a fraction of that supply. It’s seeking buyers at the same time that US exporters have also been lifting production and cementing a flurry of pacts with some of the industry’s most flexible contracts.
Qatar is traditionally known to include strict terms in supply deals, such as clauses that require delivery to specific ports, and favors contracts that last for decades. That’s deterred some buyers in Japan and Europe from committing to additional deals, as they plan for a shift from fossil fuels to renewable energy sources that could make rigid, lengthy supply agreements problematic.
Read More: Qatari LNG Shipments to Europe Drop in 2023 as Gas Prices Slump
The nation is now offering some nations in Asia deals with shorter durations than 20 years, according to the people. Bangladesh’s deal was signed for 15 years at roughly a 12.6% link to Brent crude oil plus 50 US cents per million British thermal units, they added.
That’s below prices offered last year during the peak of the global energy crisis, the people said.
Buyers in China, India, Taiwan and Pakistan are currently in talks with Qatar for more supply, according to people with knowledge of those discussions, who also asked not to be named as the details are private. Qatar’s Energy Minister Saad al-Kaabi said last month that the nation could finalize all of its supply deals for its expansion by the end of the year.
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