Relief in the pipeline if regasification can keep pace
Highlights
- Even with new supplies, the country's demand-supply gap will remain
- The country is currently grappling with a shortfall of 1,200-1,300 mmcfd
- The promised additional 1,150 mmcfd may help plug the existing hole
- But gas demand rising by another 700 mmcfd in the next three years
- The demand will hit 4,761 mmcfd by 2028
Even after scrapping plans for Summit Group's second floating LNG terminal, policymakers are holding out hope that the country's crippling gas shortage will ease from next year.
At the heart of this optimism lies four new long-term Liquefied Natural Gas (LNG) contracts, signed between 2023 and 2024, which are expected to inject an additional 1,000 million cubic feet per day (mmcfd) into the national grid starting in 2026. Petrobangla, in parallel, is planning to squeeze out another 150 mmcfd from its old, tired wells through workover operations.
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It sounds like good news—and it is, upto a point. But the numbers tell a more sobering story.
Even with these new supplies, the country's demand-supply gap will remain. Bangladesh is currently grappling with a shortfall of 1,200-1,300 mmcfd. The math is simple: the promised additional 1,150 mmcfd may help plug the existing hole, but demand is not standing still. Petrobangla's projections show gas demand swelling by another 700 mmcfd in the next three years, hitting 4,761 mmcfd by 2028.
That's a long way from where Bangladesh is now.
Bangladesh's current gas output hovers between 2,700 and 2,800 mmcfd, while demand stands at 4,000 mmcfd. Domestic fields—once the country's pride—are managing to pump out 2,000-2,100 mmcfd, and the remaining 800 mmcfd trickles in from two existing LNG import deals.
But bringing in more gas isn't just a matter of signing contracts. It's about having the infrastructure to handle it. And that's where the big question looms.
With Summit Group's second Floating Storage and Regasification Unit (FSRU) project scrapped, Bangladesh must now rely solely on two existing FSRUs—one operated by US-based Excelerate Energy, the other by Summit itself. Combined, they have a maximum regasification capacity of 1,100 mmcfd. That's already stretched thin.
Executives from both Summit and Excelerate say they can handle more cargoes if Rupantarita Prakritik Gas Company Limited (RPGCL), the government's LNG arm, can streamline port operations and expand the regasification capacity. Without a clear, actionable plan from RPGCL, however, the system risks choking under its own ambitions.
Mohsena Hassan, assistant general manager (PR & Media) of Summit Power International, said, "If Rupantarita Prakritik Gas Company ensures higher sendout in the downstream pipeline, manages LNG inventory onboard the FSRUs efficiently and optimises the LNG cargo berthing schedule, Summit LNG can accommodate and process additional cargoes without any issues."
Country manager of Excelerate Energy, Md Habibur Rahman Bhuiyan said, "We will continue to help meet Bangladesh's energy needs by operating our vessels at our standard of operational excellence."
When asked whether the existing FSRUs can process additional LNG, Muhammad Fouzul Kabir Khan, advisor to the Ministry of Power, Energy and Mineral Resources, told TBS on 13 March, "We have discussed the matter with the FSRU operators, and additional LNG cargo handling has been planned in consultation with them."
The interim government recently terminated its contract with Summit Group for the establishment of Bangladesh's third floating LNG terminal, which was intended to supply an additional 600 mmcfd of gas.
Business leaders from various sectors told TBS that Bangladesh has never been able to fully realise its economic potential due to unreliable gas and electricity supply in industries such as textiles, ceramics, steel, and fertilisers.
They suggested that with the increased gas supply, business and investment would improve, provided political stability is maintained.
Former FBCCI president Mir Nasir Hossain told TBS, "An increase in supply is not enough to attract investment; the gas price should be competitive."
The president of BCI, Anwar-ul Alam Chowdhury (Parvez), said, "Political stability, democratic transition, and long-term policies are essential for new investment."
Details of four new long-term deals
In response to depleting local gas reserves and growing demands from local entrepreneurs for sufficient gas supply, Petrobangla signed four new long-term deals with Qatar Energy Trading LLC, OQ Trading Ltd, Excelerate Gas Marketing Limited Partnership, and Summit Oil and Shipping Co Ltd.
As per the deals, starting from January 2026, 88 new LNG cargoes will supply 1,000 mmcfd of gas each year at an average price of $10.396 per mmbtu, based on a fixed price of $76 per barrel of Brent crude, with a premium ranging from $0.03 to $0.05.
Of the four companies, Qatar Energy Trading LLC will supply 1.5 million tonnes per year (mtpa) of LNG starting in January 2026, which is equivalent to about 200 mmcfd for 15 years, with 24 cargoes at a rate of $10.07 per mmbtu (1 mtpa equals 133 mmcfd of gas).
OQT, an Omani company, will supply a minimum of 0.25 mtpa to a maximum of 1.5 mtpa annually, with a maximum of 24 cargoes for 10 years at a rate of $10.646. Petrobangla stated that the number of cargoes will drop to 16 if OQT is unable to meet the maximum supply limit.
US-based Excelerate Gas is scheduled to supply a minimum of 0.85 mtpa to a maximum of 1 mtpa for 15 years, at a cost of $10.446 per mmbtu.
Homegrown Summit Oil and Shipping has signed a deal to supply 1.5 mtpa for 15 years, with 24 cargoes annually at a cost of $10.428 per mmbtu.
Existing two deals
There are two existing long-term LNG contractors – Qatar Energy LNG, formerly known as Qatargas, and OQ Trading Ltd, previously known as Oman Trading International Ltd, which began LNG supply in 2018 and 2019, respectively.
Qatar Energy LNG is supplying 1.8 to 2.5 mtpa at a cost of $10.114 per mmbtu for 15 years, while OQT is supplying 1 to 1.5 mtpa for 10 years at a price of $9.444 per mmbtu.
Why Bangladesh signed too many deals in quick succession
A grim picture of the gas reserves is presented in Petrobangla's 2022-23 annual report, published in December 2024, which states that as of 30 June 2023, there are 8.46 trillion cubic feet (Tcf) of gas remaining in the country, assuming no new gas is added from newly discovered gas wells.
Of this reserve, 1.34 Tcf is scattered across various parts of the country, either in non-producing or suspended status, meaning Bangladesh potentially has only 7.12 Tcf of extractable reserves.
Petrobangla statistics show that there are 159 gas wells in the country, although gas is extracted from only 107 wells. The average gas supply in FY23 was 2,923 mmcfd.
Petrobangla and its subsidiaries have strongly advocated for exploring gas from offshore, onshore, and workover wells, but these efforts have not yielded significant results, pushing the country toward greater reliance on gas imports, which threatens energy security.
An import-dependent gas sector is envisioned in the future programmes section of Petrobangla's annual report, which states, "Importing Liquefied Natural Gas (LNG) to compensate for increasing gas demand."
Bangladesh Gas Field Company Limited (BGCL) also has nothing to offer immediately, as it is waiting until July 2025 to determine gas reserves from seven workover wells in three gas fields – Bakhrabad, Titas, and Meghna.
Kartick Chandra Ghosh, general manager (Planning & Development) of BGFCL, told TBS, "We hope to find 15,000 million cubic feet of gas from these workover wells."
Petrobangla's gas demand projection for next 3 years
Petrobangla projects that nationwide gas demand will reach 4,761 mmcfd from 2026 to 2028.
Petrobangla has prioritised the industry, fertiliser, and power sectors for increased supply, while CNG, commercial, tea, and domestic consumers will face supply cuts.
Industrial consumption is expected to rise from 1,103 mmcfd in 2025 to 1,399 mmcfd by 2028, with power plants receiving 1,513 mmcfd in 2026, increasing to 1,673 mmcfd by 2028.
The government plans to increase gas supply to the fertiliser sector from 286 mmcfd in 2025 to 366 mmcfd in 2028, prioritising the country's food security, despite repeated calls from businessmen for supply cuts to divert gas to the industry.
Captive consumption will also increase to 825 mmcfd by 2028 from 731 mmcfd in 2025.
Gas-fired power plant scenario
Over the years, gas shortages have hampered electricity output from gas-fired power plants.
BPDB's updated data, released on 11 February 2025, shows that there are 58 gas-fired power plants in the country, with a combined generation capacity of 11,677 MW, which accounts for 43% of the country's total generation capacity of 26,906 MW.
The gas shortage forced BPDB to operate its gas-fired power plants at less than half of their capacity. In FY24, electricity generation from gas-fired power plants was 3,882 MW, which is only 48.52% of their total capacity. In FY23, the situation worsened, with gas-fired power plants generating only 3,834 MW, or 32.84% of their capacity.
Due to the failure to supply primary fuels, many power plants had to remain idle, forcing the government to pay staggering amounts in capacity payments.
In a shocking revelation, the then-state minister for power, energy, and mineral resources, Nasrul Hamid, stated in 2023 that the government had paid a total of around Tk1.05 trillion in capacity payments to power plant owners up to August 2023.
Petrobangla to reduce spot purchase
With the four new long-term LNG contracts set to supply from next year, Petrobangla will significantly reduce spot purchases, as the spot price is at least 30-40% higher than long-term purchases.
Adviser Muhammad Fouzul Kabir Khan told TBS on 12 March, "Once the four new long-term contractors resume supply, they will significantly cut spot purchases."
"We are focusing on generating 5,000 MW of electricity from renewable energy to reduce dependency on gas," he added.
