Bangladesh's Summit Group has signed a preliminary pact to supply 1.5 million tons of liquefied natural gas (LNG) per year to state-run Petrobangla for 15 years, starting from October 2026, its chairman, Aziz Khan, told Reuters.

The deal, which Khan expects to be cleared by the cabinet in less than a month, does not specify a country of origin, giving the company flexibility to source cargoes from anywhere for supply to Petrobangla.

Khan did not provide details of pricing.

Petrobangla did not immediately respond to an email seeking comment.

The deal is Bangladesh's fourth long-term LNG supply agreement, and Summit's first.

The conglomerate now runs more than a dozen fossil fuel-based power generation units and a floating storage and regasification unit (FSRU) to handle LNG imports, and plans to invest $3 billion in clean energy.

Khan said he expected construction of the planned $1 billion Matarbari onshore LNG terminal, located in the Cox's Bazar district of Chittagong, to start in 2025.

The contract has not yet been awarded, but Summit hopes to win it and start the first phase of operations at Matarbari in 2029, he added.

The project, which Summit wants to develop along with Japanese partners Sumitomo Corp (8053.T), opens new tab and JERA, will have annual capacity of about 7 million tonnes, with a provision to expand that to about 10.5 million tonnes a year.

"The construction should start sometime next year for the onshore terminal, the land acquisition is still on," Khan told Reuters in an interview on Tuesday.

"The government thinks that commissioning should be done by 2027, I personally feel that it will be done by 2029."

Khan expects spot LNG purchases to increase in the coming months, boosted by lower global prices and rising power demand.

Bangladesh has cleared purchases of 13 spot LNG cargoes during the first six months of 2024, Khan said. That compares with 10 cargoes imported in the corresponding period last year, according to data analytics firm Kpler.

Prices of Asian spot liquefied natural gas (LNG) have fallen for eight straight weeks to hit their lowest in seven months amid healthy inventories in both Europe and northeast Asia.