QatarEnergy facilities have faced significant damage caused by an Iranian drone strike this Monday, prompting the company to suspend its LNG production and supply operations temporarily. Meanwhile, the Strait of Hormuz remains closed. If LNG transportation through the strait is disrupted for a month, spot LNG prices in Asia could surge by as much as 130 percent. According to forecasts by Goldman Sachs, a multinational investment banking and financial services firm, prices could climb to $25 per million British thermal units (MMBtu).

Qatar is the world’s second-largest LNG exporter after the United States. The country supplies nearly 20 percent of global LNG demand, all of which is transported through the Strait of Hormuz.

Qatar is also a major LNG supplier to Bangladesh. Energy experts warn that if Qatar’s LNG production and export operations remain suspended for the next two to three weeks due to the ongoing Middle East conflict, Bangladesh may face significant financial challenges in procuring LNG from the spot market as an alternative.

Liquefied natural gas (LNG) currently accounts for around 100 million cubic feet per day in Bangladesh’s gas supply system. A major portion of this supply comes from QatarEnergy, the state-owned energy company of Qatar. The company provides 40 percent of Bangladesh’s total annual LNG imports. Energy sector insiders caution that a prolonged halt in QatarEnergy’s LNG operations would have a substantial impact on the country’s gas sector, including electricity generation.

Following the announcement of the suspension, gas prices in Europe surged by up to 45 percent on Monday. Dutch TTF Natural Gas Futures opened the day at €39 per megawatt hour, at one point rising to nearly €49. At the time of writing this report, prices were trading at €43.

Qatar’s LNG has played a critical role in Bangladesh’s gas supply for more than seven years. As domestic gas production declined, Bangladesh began importing LNG from Qatar in 2018. The imported LNG now supports industrial production as well as electricity generation across the country.

Energy expert Professor M. Tamim, vice-chancellor of Independent University, said, “A prolonged suspension of Qatar’s LNG production could put Bangladesh’s gas sector at risk. The power sector consumes a significant volume of gas. Any disruption in supply may lead to load-shedding.”

However, the Energy Division said discussions were held at the Prime Minister’s Office last Sunday regarding energy supply management in the context of the Middle East conflict. The prime minister was briefed on the country’s LNG supply situation. Officials noted that nine out of 11 LNG cargoes scheduled for March have already crossed the conflict zone.

Bangladesh imports LNG under long-term government-to-government (G2G) agreements with Qatar and Oman. LNG is procured from QatarEnergy and from OQT Trading of Oman.

Under the G2G agreement with Qatar, Petrobangla imports 40 LNG cargoes annually. The same volume is planned for the 2025–26 fiscal year as part of the annual import programme. According to the latest data from Rupantarita Prakritik Gas Company Limited (RPGCL), 24 LNG cargoes from Qatar had arrived in Bangladesh by January this year, with the remaining cargoes scheduled for delivery in phases.

Bangladesh has a 15-year LNG supply agreement with QatarEnergy under the G2G framework. The deal was signed on September 25, 2017, and the first LNG cargo arrived on April 24, 2018. In fiscal year 2024–25, Petrobangla imported 40 LNG cargoes from Qatar, accounting for 42 percent of total LNG imports. A similar volume is expected in fiscal year 2025–26.

Officials at Petrobangla said that eight LNG cargoes have arrived from Qatar so far this year. However, data available on the website of RPGCL shows that 24 LNG cargoes were imported from Qatar up to January of FY 2025–26.

Speaking to Bonik Barta on condition of anonymity, a senior Petrobangla official said, “Communication with suppliers has been ongoing since the outbreak of conflict in the Middle East. This isn’t a risk faced by Bangladesh alone; it affects all importing countries. We’re trying to keep energy supply operations normal. Furthermore, initiatives are also underway to explore alternative sources to prevent any supply shortfall.”

Sources at the Energy Division said a total of 115 LNG cargoes are planned for import in FY 2025–26. The estimated expenditure for this large volume of imports stands at BDT 515 billion. However, Petrobangla officials warned that the cost could increase further if the Middle East crisis persists.

Qatar’s Ministry of Defence said that a drone strike on Monday targeted a QatarEnergy facility located in Ras Laffan Industrial City (RLIC) and a power plant in Mesaieed. RLIC is the world’s largest LNG export hub. It houses the world’s largest artificial harbour along with extensive infrastructure, including gas-to-liquids plants, petrochemical facilities, refineries, and power and desalination plants. Research firm Wood Mackenzie said that any disruption to LNG shipments through the Strait of Hormuz could once again intensify competition between Asia and Europe for limited cargoes. With Qatar’s LNG production now disrupted, the situation is likely to become even more challenging.