Bangladesh continues importing costly liquefied natural gas (LNG) to address the country’s gas shortage. In the current FY 2025–26, Petrobangla plans to import LNG worth around BDT 550 billion. Roughly 29 percent of these cargoes are expected to be sourced from the spot market, where prices are significantly higher than in long-term supply contracts.
Experts say Bangladesh could have purchased more LNG at lower prices if it had prioritized long-term purchase agreements earlier. That approach would have reduced reliance on the volatile spot market while cutting Petrobangla’s overall spending on LNG.
According to Petrobangla sources, 71 LNG cargoes will arrive in the country this fiscal year under existing and new long-term contracts. Another 33 cargoes are planned from the spot market. Prices for LNG under long-term contracts range from $9 to $11 per million British thermal units (MMBtu), while spot market prices are projected at around $14 per MMBtu. However, Petrobangla’s most recent purchase from MS Aramco Trading Singapore Pte Ltd cost $11.88 per MMBtu.
Energy analysts describe LNG as an extremely expensive fuel for Bangladesh’s energy system, considering the country’s situation and the supply system. They argue that the previous government could have secured cheaper and more stable gas supplies if it had emphasized affordability and long-term contracts. That would have reduced dependence on spot market purchases and saved substantial public funds. Under Petrobangla’s current plan, a large share of LNG imports will come from the spot market, which is an approach experts say could have been avoided if more long-term deals were secured.
Experts also point out that Bangladesh has not conducted major local gas exploration in the past two decades, nor made significant investments in the sector. They note that while the power sector has received generous allocations over the past 15 years, the energy sector’s budget has been minimal. In the current fiscal year, only slightly more than BDT 10 billion has been allocated for well drilling and geological surveys — an amount specialists describe as inadequate for any large-scale exploration effort.
Officials at the Energy Division and Petrobangla say LNG imports from the spot market will gradually decline as cargoes under new long-term contracts increase. LNG trading follows the calendar year, and based on that system, Bangladesh will buy only 17 cargoes from the spot market next year — far fewer than those purchased under long-term contracts. They added that keeping a small window open for spot market purchases mainly allows flexibility in response to price and supply conditions. When prices rise, the government can suspend or reduce spot purchases.
Regarding the issue, Energy and Mineral Resources Secretary Mohammad Saiful Islam told Bonik Barta, “There are some challenges in importing all LNG cargoes under long-term contracts. It’s important to keep at least 10 to 20 percent of cargoes open for purchase from the spot market. Import complications or supply disruptions at terminals can arise during adverse weather. In such cases, the spot market often provides an immediate solution. The option also allows us to take advantage when prices drop. The fiscal year figure may appear higher, but on a calendar-year basis, only 17 cargoes will be bought from the spot market in the next year (2026), which is significantly lower than the number under long-term contracts.”
One major factor driving Petrobangla’s high LNG import costs is the absence of a land-based LNG terminal. The previous Awami League government prioritized floating terminals instead, leaving land-based facilities undeveloped. This has repeatedly exposed Petrobangla’s supply system to operational risks and forced it to bear additional expenses such as regasification charges and terminal shutdown costs. As a result, LNG has become even more expensive.
For FY 2025–26, regasification expenses from the Summit and Excelerate terminals are projected at BDT 22.51 billion. Bangladesh began importing LNG in FY 2018–19. Over the past eight years, the two floating terminals have cost an estimated BDT 160 billion in regasification charges alone, assuming an annual average of around BDT 20 billion. Experts in the energy sector believe that if a land-based terminal had been built in the first year of LNG imports, it could have been constructed with around 70 percent of that total regasification expenditure.
A former senior official of Petrobangla, speaking on condition of anonymity, told Bonik Barta, “Three years ago, proposals were made by Qatar and Oman to sign long-term LNG purchase contracts. But the government at that time didn’t accept those offers. They had sent several letters offering LNG at favorable prices. However, because global gas prices were low at that time, the proposals were ignored. If the opportunity had been taken then, the Energy Division could have signed major long-term deals at much lower prices.”
According to the Rupantarita Prakritik Gas Company Limited (RPGCL), the previous Awami League government initiated a plan back in 2019 to build a land-based LNG terminal with a capacity of 1 billion cubic feet (BCFE) in Matarbari of Moheshkhali, Cox’s Bazar. An Expression of Interest (EOI) was issued for the project, and five companies were shortlisted. However, allegations suggest that the plan did not move forward due to commission-related trading in spot market LNG imports and the involvement of several ministers and bureaucrats of the former government.
Experts say that if the land-based terminal had been constructed, it would have ensured a more reliable gas supply system and reduced operational complexities of floating terminals while creating larger storage capacity. It would also have helped reduce the risk of LNG supply disruptions during natural disasters.
After the interim government assumed office, the initiative to construct the land-based terminal was revived. The project will now proceed under a public-private partnership (PPP) model rather than through a single company. So far, at least six companies have expressed interest to the Energy and Mineral Resources Division (EMRD) in the terminal’s construction.
When asked about the progress of the project, the Energy Division secretary told Bonik Barta, “Progress on the construction of the land-based LNG terminal is satisfactory. After the current government took the initiative, several companies have shown strong interest. The government has decided to build the terminal under the PPP model. The interested companies have already been shortlisted, and a project director (PD) has been appointed. We expect to move forward on a larger scale very soon.”
Officials from the EMRD told Bonik Barta that constructing a land-based LNG terminal is a long-term process. Given the country’s gas supply needs, the project should have been initiated much earlier. Currently, one year has already been spent on the consulting firm for the terminal. Finalizing contracts is expected to take another year. Once fieldwork begins, it will take seven to eight years to become operational. The project also involves an estimated investment of at least BDT 150–200 billion. There was uncertainty over whether the government would fund this entirely, attract foreign investment, or pursue a joint venture. Officials say these factors have been the main reasons for delays in constructing the land-based terminal.
Globally, information from various company websites shows that building a permanent land-based LNG terminal costs at least $500 million to $1 billion, depending on location, capacity, project complexity, and construction timeline. Data show that the projected cost of an onshore LNG terminal in Bangladesh is around $1 billion, while a floating terminal is estimated at $500 million. For comparison, Germany’s Stade land-based terminal was projected to cost $567 million in 2018. On the other hand, India’s Dhamra Port terminal in Odisha was built in 2017 at a cost of $950 million.
Domestic gas production in Bangladesh has been steadily declining each year. A lack of major long-term investment in local gas exploration, combined with an increase in LNG imports, has created a significant supply gap. Currently, the country receives just over 2,750 million cubic feet of gas against a demand of 3,800 million cubic feet of LNG. Experts warn that if local gas supply continues to decline, the situation will worsen. They emphasize that increasing imports without intensifying exploration efforts will raise the country’s energy risk.
Petrobangla sources indicate that a total of 115 LNG cargos are being purchased for FY 2025-26. Under long-term contracts, 40 cargos will be procured from QatarEnergy at a cost of BDT 156.17 billion, and 16 cargos from Oman at BDT 58.32 billion. Under short-term contracts with the same company, 11 cargoes will cost BDT 59.32 billion. Additionally, under new long-term contracts, six cargos from Qatar Energy will cost BDT 23.30 billion, two cargos from OQ Trading will cost BDT 8.22 billion, and seven cargos from the U.S.-based Excelerate Energy are budgeted at BDT 28.22 billion. Spot market purchases of 33 cargoes are projected to cost BDT 181.85 billion.
Energy expert and geologist Professor Badrul Imam told Bonik Barta, “Meeting demand through imports is not a solution given the decline in local gas. In fact, it poses a long-term risk. Increasing LNG imports continues the policies of the previous government. We are not getting large reserves through drilling, this is not believable. Geologically, Bangladesh is a delta, similar to Nigeria and Indonesia. If they can access large gas reserves, why can’t we? They keep saying drilling is ongoing. But we need to see how much is actually being drilled. Compared to other countries, Bangladesh has drilled the fewest wells over recent years. I don’t think the current pace is significantly higher. The real long-term solution is to increase domestic production and conduct extensive exploration and drilling in undiscovered areas.”
EMRD sources said that eight rigs are currently operating for local gas well drilling. Two more rigs are being acquired. In addition to the 50 wells already planned, the current interim government has set a target to drill another 100 wells by 2028.