Bangladesh scrambles for alternatives as LNG from Qatar halts
Policymakers warn that if such a major supplier dries up, securing cargoes from elsewhere will become increasingly difficult due to tightening global supply
Bangladesh's power plants and factories risk fuel shortages within days after QatarEnergy invoked force majeure on its long-term LNG contract, forcing Petrobangla to scramble for costly spot cargoes in an increasingly strained global market.
QatarEnergy, the world's largest LNG producer and Bangladesh's biggest supplier, halted production following an Iranian attack earlier this week. Prime Minister Tarique Rahman has instructed authorities to urgently procure LNG from the spot market to avert a nationwide energy crisis.
Officials at the Energy and Mineral Resources Division confirmed that at least four spot cargoes are being sought for delivery in March.
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QatarEnergy's Force Majeure notice
On 2 March, QatarEnergy formally notified Petrobangla of a "potential event of Force Majeure" under Clause 17 of their agreement, citing "recent hostilities in the region." Petrobangla Chairman Md Arfanul Hoque acknowledged receipt of the letter and said contingency measures are already underway.
Under the contract, QatarEnergy was scheduled to deliver 40 of Bangladesh's 115 planned LNG cargoes this year. With supplies now uncertain, Petrobangla fears a sweeping gas shortage that could disrupt power generation, industrial output, exports, and daily life.
Other long-term suppliers including QatarEnergy Trading LLC, OQ Trading Ltd, and Excelerate Gas Marketing Limited may also face disruptions due to their reliance on Qatari supply, though trading firms could have limited flexibility to source alternatives.
A force majeure clause excuses liability for non-performance during certain unforeseeable, uncontrollable, and exceptional events like natural disasters, wars, or pandemics.
QatarEnergy supplies around 20% of the world's seaborne LNG.
Scramble for alternatives
Policymakers warn that if such a major supplier dries up, securing cargoes from elsewhere will become increasingly difficult due to tightening global supply.
The QatarEnergy letter states, "While the Seller is still assessing the situation, it considers it important to inform the Buyer that these circumstances may prevent it from performing its delivery obligations under the Agreement."
It added, "We will keep you updated as the situation evolves and provide further information when it becomes available."
Immediately after receiving the notice, Petrobangla wrote back to QatarEnergy seeking clarification on whether deliveries would continue, as the letter used the phrase "may prevent" – leaving room for uncertainty.
Even before the production halt, LNG supply had been under pressure following Iran's closure of the Strait of Hormuz, a critical shipping route.
According to the latest Petrobangla data, seven LNG cargoes are scheduled to arrive in March – six from QatarEnergy via the Strait of Hormuz and one from Angola.
Petrobangla has already secured four cargoes from QatarEnergy, while two remain uncertain.
"We wrote to QatarEnergy to confirm whether they would be able to supply or not by today (3 March)," Arfanul said.
Contingency plan activated
Amid uncertainty over long-term supplies, Petrobangla has activated contingency plans and on Monday called for quotations from enlisted suppliers for delivery windows on 15 and 18 March. These two windows were originally scheduled for QatarEnergy cargoes, which are now in question following the force majeure declaration.
Petrobangla has also reached out to other suppliers to confirm whether they can honour their contractual commitments, given their exposure to Qatari supply, the chairman added.
How Petrobangla plans to offset supply cut
With the oil and gas supply chain already fragile amid escalating tensions in the Middle East, concerns are deepening. US President Donald Trump has signalled that the war could drag on for another four to five weeks — a statement that sent shockwaves through global energy markets as oil and gas prices climbed.
Meanwhile, Iran's complete blockade of the Strait of Hormuz has left ships stranded, further complicating logistics.
Officials from the Energy Division and Petrobangla said that if hostilities persist and shipping through the Strait remains blocked, Bangladesh will have little choice but to turn to the spot market.
"We got the green light from the government to search for alternative sources like the spot market," Arfanul said. "But availability has become a major challenge following the production halt by a global giant like QatarEnergy."
Despite soaring prices, the Energy Division has instructed Petrobangla to secure spot cargoes as quickly as possible to fill the vacuum created by disrupted long-term supplies.
Before the escalation, spot LNG was trading below $9 per MMBtu. On Monday, the Asian spot LNG benchmark – the Japan-Korea Marker (JKM) – surged to $13.365 per MMBtu.
If prices rise further, the burden on Bangladesh's energy import bill will aggravate.
Asked how Petrobangla would navigate prolonged high prices, the chairman struck a cautiously hopeful tone: "I hope the war will not last for months," he said. "To keep supply afloat, we have to bring LNG from the spot market. Otherwise, we will have no option but to cut supply to all sectors."
April supply also in question
Policymakers are now sounding alarm bells over April as well, fearing that the crisis may spill into the following month.
Officials say the supply chain has become increasingly fragile due to the complex geopolitical situation and the knock-on impact on QatarEnergy's output.
The Petrobangla chairman said the company has already reached out to all April suppliers seeking clarity.
"We have written to our April suppliers asking them to make their position clear regarding supply next month. They have been given time until 10 April to confirm," he said.
The chairman added that Petrobangla's next course of action will depend on their responses. "Based on their reply, we will decide our next steps, including securing additional LNG from the spot market, if necessary."
With uncertainty now stretching beyond March, energy officials fear that without timely confirmations, Bangladesh may have to rely even more heavily on high-priced spot cargoes to keep gas supply flowing.
