Govt fast-tracks China LNG deal
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 seeks to ease an acute natural gas shortage aggravated by the recent fire at an existing LNG import terminal.
The Cabinet Committee on Economic Affairs, chaired by Finance Minister Amir Khasru Mahmud Chowdhury, on Tuesday granted policy approval to process a proposal from China’s China National Energy Engineering & Construction Co Ltd (CNEE) to develop the Kutubjom FSRU under a government-to-government (G2G) arrangement.
The proposal was submitted by the Energy and Mineral Resources Division.
The approval represents the first formal step towards establishing another LNG import terminal at Maheshkhali, a project officials describe as increasingly urgent following the disruption to gas supplies caused by the recent fire at one of the country’s operational FSRUs.
Bangladesh has become increasingly dependent on imported liquefied natural gas (LNG) to offset the continued decline in domestic gas production.
Imported LNG is regasified through floating terminals before being fed into the national gas transmission network.
The recent fire at one of the FSRUs significantly reduced the country’s regasification capacity, prompting Petrobangla to curtail gas supplies to industries, power plants, fertiliser factories and residential consumers.
The incident exposed Bangladesh’s heavy reliance on a limited number of LNG terminals and underscored the absence of adequate backup capacity within its gas import infrastructure.
The disruption has further deepened the country’s gas crisis. According to official estimates, Bangladesh’s daily gas demand stands at around 3,800 million cubic feet per day (MMCFD), while supply has dropped to approximately 2,700 MMCFD, leaving a deficit of about 1,100 MMCFD.
The shortfall has affected industrial production, electricity generation and household consumers nationwide.
Business leaders, particularly from the textile and ready-made garment sectors, have repeatedly called on the government to restore adequate gas supplies, warning that many factories are operating well below capacity because of persistently low gas pressure.
During recent meetings with business representatives, the government indicated that decisions on expanding LNG import infrastructure would be taken shortly as part of broader efforts to strengthen the country’s energy security.
The proposed Kutubjom FSRU is expected to enhance Bangladesh’s LNG import network by increasing regasification capacity and reducing the risks associated with dependence on only a handful of floating terminals.
Bangladesh began importing LNG in 2018 through its first floating storage and regasification terminal at Maheshkhali to compensate for declining domestic gas production.
Since then, LNG has become an increasingly important component of the country’s energy mix, supplying fuel to power plants, industries and other key sectors.
Although detailed technical specifications, investment costs and the project implementation schedule have yet to be disclosed, officials expect the Kutubjom FSRU to strengthen the resilience of Bangladesh’s gas supply system by diversifying LNG import infrastructure and reducing the impact of disruptions at individual terminals.
