Bangladesh’s gas crisis exposes the risks of deeper LNG dependence

DHAKA, 16 August 2026: Bangladesh is facing renewed pressure on its electricity and gas systems as shortages linked to disruptions at an LNG terminal continue to affect power generation, industries, transport and households. The crisis has intensified debate over whether growing dependence on imported LNG is becoming a strategic vulnerability for the country.

The immediate disruption began on 21 July, when a technical failure at an Excelerate Energy-operated floating LNG terminal off Moheshkhali reduced national gas supply by about 450 million cubic feet per day. Petrobangla data indicated that supply had already stood at roughly 2,620 million cubic feet per day against demand of about 3,800 million cubic feet before the shutdown.

The terminal later partially resumed operations, easing some pressure. Reuters reported in August that one regasification unit had returned to operation, restoring about 115 million cubic feet per day, while repairs continued.

From gas shortage to power pressure

Bangladesh’s electricity system relies heavily on natural gas, making the power sector particularly sensitive to fluctuations in supply. When gas-fired plants receive less fuel, authorities must rely more heavily on alternative generation sources or reduce electricity supply.

The July disruption pushed the electricity system under significant strain. Reports at the time recorded increased load-shedding, while industries faced lower gas pressure and CNG stations in parts of Dhaka experienced shortages and long queues.

The impact also reached households. Reduced gas pressure left some residents struggling to cook, while businesses and factories faced difficulties maintaining normal operations. The episode demonstrated how a problem originating at an offshore energy facility can rapidly become an urban and economic crisis.

Bangladesh’s energy vulnerability is no longer confined to power plants; it reaches factories, transport networks and household kitchens.

The government has also maintained electricity-conservation measures as it attempts to manage pressure on the power system. These measures illustrate the wider economic cost of an energy shortage: reduced operating hours and conservation requirements can affect commerce even when the original disruption occurs far from major population centres.

Why LNG matters more than before

Bangladesh’s dependence on LNG has grown as domestic natural-gas production has struggled to keep pace with demand. Reuters reported that national demand was around 3,800–4,000 million cubic feet per day while available supply was about 2,600 million cubic feet, leaving a substantial structural gap.

Imported LNG helps fill that gap, but it also connects Bangladesh more directly to international energy markets. Prices, shipping conditions, supplier disruptions, geopolitical conflicts and foreign-exchange constraints can all influence the cost and reliability of imported gas.

The recent crisis also occurred amid international LNG-market pressures linked to the conflict involving Iran. Bangladesh therefore faces two interconnected risks: domestic infrastructure failures and external shocks beyond its direct control.

The government has responded partly through additional LNG procurement. In July, authorities approved the purchase of a cargo from Vitol Asia at $22.35 per million British thermal units, at an estimated cost of about Tk949.43 crore.

Energy security becomes strategic security

The crisis has implications beyond the immediate question of electricity supply. For an import-dependent economy, energy availability affects industrial production, transport, food preparation, investment and inflation.

That makes energy security closely connected with national security. A disruption thousands of kilometres away can affect domestic economic activity through international fuel markets, while a technical failure at a single terminal can reduce supply across multiple sectors.

Yet LNG remains difficult to replace in the short term. With domestic gas production under pressure, Bangladesh cannot simply withdraw from the international LNG market without creating an even larger supply gap.

The strategic question is therefore not whether Bangladesh should use LNG, but how much of its energy security should depend on it.

Building a more resilient energy system

The recent disruption points to the need for greater diversification rather than a single solution. Bangladesh could strengthen resilience through several measures:

• accelerating economically viable domestic gas exploration;

• improving maintenance and redundancy at LNG terminals;

• expanding renewable energy and storage capacity;

• upgrading electricity transmission and distribution networks;

• improving demand management and energy efficiency; and

• developing emergency plans for major international fuel disruptions.

A new LNG terminal has also received government approval in Moheshkhali, with a planned regasification capacity of 600 million cubic feet per day under a proposed 15-year terminal-use arrangement. While additional capacity could improve supply resilience, it would also deepen the country’s dependence on imported LNG unless accompanied by broader diversification.

The immediate shortage may ease as damaged infrastructure returns to service. The larger policy question will remain: whether Bangladesh uses the crisis to build a diversified energy system or responds mainly by expanding its exposure to the same import-dependent model.

For Bangladesh, energy security will increasingly mean more than securing enough gas for tomorrow’s power generation. It will mean ensuring that a single technical failure, international price shock or geopolitical disruption cannot threaten the functioning of the wider economy.