Govt fast-tracks new LNG terminal at Maheshkhali amid acute gas crisis
The government clears a proposal to fast-track a new FSRU at Maheshkhali under a Bangladesh-China G2G arrangement as it seeks to ease a worsening gas shortage following a fire at an existing LNG terminal.
Highlights
- Govt clears new Maheshkhali FSRU
- LNG terminal fire deepens gas crisis
- Gas supply trails demand by 1,00 MMCFD
- New terminal to boost LNG capacity
The government has moved to fast track the installation of a new Floating Storage and Regasification Unit (FSRU) at Kutubjom in Maheshkhali, Cox's Bazar, as Bangladesh struggles with an acute natural gas shortage worsened by the recent fire at an existing LNG terminal.
The Cabinet Committee on Economic Affairs today (28 July), chaired by Finance Minister Amir Khosru Mahmud Chowdhury, gave its policy approval to process a proposal submitted by China's China National Energy Engineering & Construction Co. Ltd (CNEE) for the development of the Kutubjom FSRU under a government to government (G2G) arrangement.
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The proposal was placed by the Energy and Mineral Resources Division.
The approval marks the first formal step towards developing another LNG import facility at Maheshkhali, a move officials believe has become increasingly urgent following the disruption to gas supplies caused by the recent fire at one of the country's operational FSRUs.
Bangladesh currently relies heavily on imported liquefied natural gas to compensate for the steady decline in domestic gas production.
Imported LNG is regasified through floating terminals before being injected into the national transmission network.
The recent fire at an FSRU significantly reduced regasification capacity, forcing Petrobangla to curtail gas supply to industries, power plants, fertiliser factories and households.
The incident exposed the country's dependence on only a limited number of LNG terminals and highlighted the absence of sufficient redundancy in the import infrastructure.
The disruption has intensified an already severe gas crisis. According to official estimates, Bangladesh's daily gas demand is around 3,800 million cubic feet (MMCFD), while supply has fallen to roughly 2,700 MMCFD, leaving a deficit of about 1,100 MMCFD.
The shortage has affected industrial production, electricity generation and household consumers across the country.
Business leaders, particularly from the textile and garment sectors, have repeatedly urged the government to restore adequate gas supply, saying many factories are operating far below capacity because of extremely low pipeline pressure.
During recent meetings with business representatives, the government indicated that decisions on expanding LNG import infrastructure would be taken soon as part of broader efforts to improve energy security.
The proposed Kutubjom FSRU would strengthen Bangladesh's LNG import network by providing additional regasification capacity and reducing the risks associated with dependence on only a few floating terminals.
Bangladesh began importing LNG in 2018 through its first floating terminal at Maheshkhali to offset declining domestic gas production.
LNG has since become an increasingly important component of the country's energy mix, supplying gas to power generation, industries and other sectors.
The proposed Kutubjom FSRU is expected to enhance the resilience of Bangladesh's gas supply system by diversifying import infrastructure and reducing the impact of unexpected disruptions at individual terminals, although detailed technical specifications, investment costs and implementation timelines are yet to be disclosed.
