Bangladesh hunts for gas closer to home as energy crisis deepens

Bangladesh is seeking alternative sources of natural gas amid a deepening energy crisis, stemming from extended shipping disruptions in the Strait of Hormuz. The country is exploring the possibility of procuring liquefied natural gas (LNG) from Malaysia using specialized cryogenic containers, also known as ISO tanks, as a short-term solution.

In the longer term, there are plans to construct a pipeline to import gas from Myanmar, reducing Bangladesh's reliance on Persian Gulf shipments. Energy Minister Iqbal Hassan Mahmood revealed the pipeline plan to local newspaper The Daily Star on August 2. Bangladesh is also reportedly considering LNG shipments from the United States and has issued tenders to secure timely supply.

These measures underscore the nation's urgent need for affordable gas, following the Hormuz shipping disruptions that have exposed its vulnerabilities and strained an already struggling economy. The energy import bill has surged by an estimated US$2.5 billion due to the Middle East conflict, which has forced Bangladesh to purchase extremely expensive LNG.

Even with this, the country has faced difficulties in sourcing the necessary volumes of the super-cooled fuel, prompting households and industries to reduce energy consumption. The International Monetary Fund highlighted that Bangladesh's economy was already grappling with significant challenges, and the war has exacerbated inflationary pressures.

In 2023, Bangladesh received approximately 61% of its LNG from Qatar, which has recently imposed a force majeure on shipments to Asian consumers, citing the attack on its Ras Laffan plant at the onset of the US-Iran conflict.