Highlights:

 

Bangladesh's natural gas reserves are dwindling fast, pushing the country to depend heavily on costly spot purchases of liquefied natural gas (LNG) to keep industries and power plants running.

Experts warn that unless new gas fields are discovered and production begins from untapped reserves, the country's local supply could run dry within the next eight years.

Petrobangla data shows that of the 29.74 trillion cubic feet (tcf) of extractable gas reserves discovered so far, 21.08tcf has already been extracted. Only 8.66tcf remained as of June 2024.

Daily output from domestic fields has fallen to around 1,800 million cubic feet per day (mmcfd), down a third from 2,700mmcfd in 2017.

"Local production is declining but demand is rising in every sector," said AKM Mizanur Rahman, director (finance) at Petrobangla. "To meet the gap, we have no choice but to increase LNG imports."

Record LNG import

LNG imports reached record levels in 2025. Between January and August, Rupantarita Prakritik Gas Company Ltd (RPGCL) imported 35 spot LNG cargoes, compared with 21 during the same period last year. 

In August alone, the state-run company bought 3,427mmcf of LNG – a 57% jump year-on-year.

Petrobangla is authorised to import 56 cargoes under long-term contracts, but the remaining 52 of its planned 108 shipments this year must come from costlier spot markets. For FY26, the company expects to import 115 cargoes at an estimated cost of Tk580 billion.

Meanwhile, the growing dependence on imported gas has deepened the government's subsidy burden.

To cover the gap between high import prices and low domestic tariffs, Tk8,900 crore in gas subsidies were paid in FY25, up from Tk6,000 crore the year before.

Local fields losing pressure

The drop in output stems largely from reservoir depletion, underinvestment, and delays in exploration and well development.

Major fields such as Titas, Bibiyana, and Rashidpur are steadily losing pressure. Overall domestic production fell to 1,850mmcfd by June 2025.

Even with LNG imports, total gas distribution dropped to 2,526mmcfd in FY25 from 2,715mmcfd a year earlier. Domestic gas costs roughly Tk3 per cubic metre, while imported LNG costs around Tk55.

Petrobangla estimates the blended cost of gas at Tk19.09 per cubic metre, while the weighted average sales price is Tk11.91 – implying a subsidy of Tk7.18 per cubic metre.

Exploration lags behind

Bangladesh currently operates 20 active gas fields out of 29. The last major reserve assessment in 2010 estimated total recoverable gas at 28.79tcf. 

Among key producers, Titas in Brahmanbaria holds about 2tcf, while Bibiyana in Habiganj has 1.66tcf.

Unexploited fields like Ilisha, Bhola North, Jakiganj, and Kutubdia remain undeveloped because of infrastructure bottlenecks and limited financing. 

The interim government now plans to drill 100 new wells, including 31 refurbishments, to add around 650mmcfd to national supply.

"Contracts for most wells have been signed," said Petrobangla's Mizanur Rahman. "Some walkover wells will start producing soon, and we expect to discover about 100mmcfd from them."

Bapex underfunded

Experts say Bangladesh's exploration pace has slowed dramatically since the 1990s. The last major discovery, Bibiyana, was made in 1998, and only one small field – Jakiganj – has been found since 2021.

Efforts to strengthen the state-run Bangladesh Petroleum Exploration and Production Company (Bapex) have stalled for years. 

Plans to buy a new drilling rig, estimated to cost Tk3.5-4 billion, remain pending. The company's last major equipment purchase was in 2012.

"Bapex has been underfunded for decades and deliberately weakened to favour foreign companies," said energy expert Badrul Imam. 

"If the government wants energy security, it must invest properly in local exploration," he said.

Industry under strain

The country's growing gas shortage is already throttling industries. Many factories receive less than two-thirds of their required gas, forcing them to operate below capacity.

Industrial gas demand was projected at 976mmcfd in FY25, but actual supply hovered around 560-600mmcfd. National demand now exceeds 4 billion cubic feet per day, while domestic output remains below 2.7 bcf/d.

Tariffs have also surged. In January 2023, the previous government raised industrial gas prices by up to 179%, followed by another 33% hike this year for new connections.

LNG Import