Natural gas helped build Bangladesh’s modern power and industrial systems. Domestic fields once provided an affordable source of energy for electricity generation, fertilizer production, manufacturing, transport, commercial users, and urban households. Gas remains the country’s most important indigenous energy resource and accounts for more than half of its primary energy supply.
The central issue is no longer whether Bangladesh has a large gas market. Demand already exceeds available supply. The problem is how the country can replace declining production without making electricity and industrial energy unaffordable.
Bangladesh has responded by importing liquefied natural gas, drilling additional wells, reconsidering offshore exploration, and expanding parts of its transmission network. These measures have reduced the size of the immediate shortage, but they have not removed the structural gap between gas demand and supply.
Domestic Fields Can No Longer Carry the Entire Market
Bangladesh has discovered 29 gas fields, of which 20 were producing in the 2023–24 financial year. The country had 107 producing wells and a domestic production capacity of slightly more than 2,000 million cubic feet per day.
Official estimates placed remaining recoverable proven and probable reserves at approximately 8.83 trillion cubic feet as of June 2024. Bangladesh had already produced around 21.1 trillion cubic feet from its known recoverable resource base.
The production trend is more important than the reserve total alone. Domestic output reached its highest level in the middle of the 2010s and has declined as major fields have matured. By 2025, production was about 15 percent below its 2016 peak. Existing wells face falling pressure, while exploration and large new discoveries have not advanced quickly enough to replace depleted volumes.
Bibiyana is the country’s most important producing field. Operated by Chevron, it supplies a large share of Bangladesh’s domestic gas. Chevron also operates the Jalalabad and Moulavi Bazar fields. Together, international operators produced about 61 percent of national gas output in the 2023–24 financial year, while state-owned companies produced the remaining 39 percent.
This concentration creates operational risk. Maintenance, reservoir problems, or unexpected production losses at one large field can quickly affect the national balance. Bangladesh has limited spare supply available to replace a sudden decline.
State companies, including Bangladesh Petroleum Exploration and Production Company, Bangladesh Gas Fields Company, and Sylhet Gas Fields Limited, continue to drill development and workover wells. These projects can slow the decline and add smaller volumes, but they are unlikely to restore the large surplus that existed when demand was lower and the main fields were younger.
Gas Shortages Move Directly Into Power and Industry
The natural gas shortage affects far more than the energy sector. Gas is deeply integrated into Bangladesh’s wider production system.
Power generation accounted for about 42 to 43 percent of gas consumption in recent official assessments. Captive power used by factories represented another major share. Industrial facilities consume gas directly for boilers, heating, processing, dyeing, washing, glass production, ceramics, steel, cement, and other activities.
Bangladesh’s fertilizer plants also use natural gas as both fuel and feedstock. When gas is unavailable, fertilizer production can fall and imports may rise. Compressed natural gas remains part of the transport market, while millions of urban customers use pipeline gas for cooking.
Available supply has been estimated at roughly 20 to 25 percent below demand when curtailed consumption is included. This means recorded gas use does not represent the full size of the market. Power plants and factories often receive less gas than they could consume.
The power sector experiences the most visible effect. Bangladesh has installed gas-fired generating capacity that cannot always operate because the fuel is unavailable or delivered at inadequate pressure. World Bank assessments have linked gas shortages to the unavailability of a significant share of generating capacity during peak demand.
Industrial consequences can be equally serious. Factories with captive generators may switch to diesel when pipeline gas is curtailed. Diesel generation is more expensive and increases production costs. Export industries, including ready-made garments and textiles, are exposed because gas is used for factory power as well as washing, dyeing, and finishing processes.
For Bangladesh, a gas shortage therefore becomes an electricity problem, an export competitiveness problem, a fertilizer problem, and a public-finance problem at the same time.
LNG Has Become Essential but Expensive
Bangladesh began importing LNG in 2018. Imported cargoes are converted back into gas at floating storage and regasification units near Moheshkhali Island and then delivered into the national transmission network.
The two floating terminals have a combined regasification supply capacity of approximately 1,100 million cubic feet per day. Actual deliveries can be lower because of maintenance, weather, cargo scheduling, pipeline limitations, and financial constraints.
By 2025, imported LNG supplied more than one-quarter of Bangladesh’s gas consumption. One World Bank assessment placed total supply at around 3,120 million cubic feet per day, with approximately 2,150 million cubic feet coming from domestic fields and the remaining 31 percent arriving as LNG.
Long-term contracts with suppliers including Qatar and Oman provide part of the import requirement. Bangladesh has also purchased spot-market cargoes when additional supply was needed. Spot LNG exposes the country to sudden international price increases. During periods of high global prices, Bangladesh has reduced purchases, contributing to domestic fuel shortages.
LNG also creates pressure on foreign currency reserves. Domestic gas is produced and sold within the national economy, while LNG must be paid for in foreign currency. Currency depreciation increases its local cost even when the international LNG price is stable.
Petrobangla, the state-owned company responsible for imports and much of the gas system, does not consistently recover the full cost of supply through customer tariffs. The difference is supported through government subsidies, delayed payments, financing arrangements, and periodic price adjustments.
This financial structure makes supply security dependent on more than terminal capacity. Bangladesh must also maintain access to foreign currency, supplier credit, payment guarantees, and affordable long-term contracts.
The Gas Network Was Built Around Eastern Production
Bangladesh’s gas system also has a geographic problem. Most producing fields are located in the east and northeast, while demand has expanded across Dhaka, Chattogram, central industrial areas, and parts of western and southern Bangladesh.
The transmission system must carry gas from producing regions and the Moheshkhali LNG entry point to distant power plants and industrial centres. Bottlenecks can cause low pressure even when more gas is technically available at the national level.
New pipelines have improved the movement of regasified LNG from the coast. However, additional transmission investment, compressor capacity, metering, maintenance, and distribution upgrades are still required. Leakage and unaccounted-for gas also reduce the quantity available to paying users.
Floating LNG terminals present another form of infrastructure exposure. They can be developed more quickly and cheaply than large land-based terminals, but offshore operations may be interrupted by cyclones, rough seas, or technical damage. Bangladesh’s coastal exposure makes resilience and backup capacity important parts of gas planning.
Proposed onshore terminals could increase import capacity and reduce dependence on two floating facilities. However, they would require major investments in port access, dredging, storage, regasification, pipelines, and long-term LNG procurement.
Exploration Must Compete With the Simpler Option of Imports
Bangladesh still has unexplored or lightly explored areas onshore and offshore. The Bay of Bengal may contain additional resources, particularly because gas discoveries have been made in neighbouring parts of the wider basin.
Offshore exploration has remained limited despite the settlement of maritime boundaries with India and Myanmar. Deepwater drilling is costly, and companies require attractive production-sharing terms, reliable data, regulatory stability, and confidence that discovered gas can be sold at a commercial price.
LNG is faster than a major offshore discovery. Cargoes can be purchased once terminal and pipeline capacity are available, while exploration may take years without guaranteeing success. This creates a risk that urgent import decisions receive priority while domestic exploration continues to move slowly.
A durable gas strategy requires both. LNG can cover part of the near-term shortage, but new domestic production would reduce exposure to global prices and foreign-exchange pressure. Workovers and development wells can support current fields, while seismic surveys and exploration drilling are needed to find larger replacement resources.
Bangladesh Needs a Gas Strategy Rather Than a Single Supply Project
Bangladesh cannot solve its natural gas shortage only by importing more LNG. Greater imports would improve physical supply, but they could also increase electricity costs, subsidies, foreign-currency demand, and exposure to international market disruption.
Domestic drilling alone is also unlikely to close the gap quickly. Existing fields are declining, and major new discoveries require time and investment.
The country’s most workable path combines production support, new exploration, secure long-term LNG contracts, stronger transmission infrastructure, better metering, financially sustainable pricing, and faster development of non-gas electricity sources. Natural gas will remain essential to Bangladesh’s power and industrial economy, but its future role will depend on whether the country can manage scarcity without allowing imported fuel costs to weaken the sectors that gas was originally used to support.
