South Asian economies including Bangladesh could face mounting economic and energy security risks as they expand liquefied natural gas (LNG) infrastructure amid rising geopolitical tensions in the Middle East, a new report has warned.
Research released on Thursday by Global Energy Monitor (GEM) said projects worth about $107bn for LNG import terminals and gas pipelines have been announced or are under construction across India, Bangladesh and Pakistan.
The findings, based on GEM’s Asia Gas Tracker database, come as global energy markets have been shaken by price volatility linked to escalating tensions in the Middle East, including attacks on Iran by the United States and Israel.
Analysts say such developments highlight the vulnerability of LNG-dependent economies to geopolitical shocks.
Shipping disruptions have also been reported around the strategically vital Strait of Hormuz, a narrow waterway through which a significant share of the world’s oil and gas exports passes. Any disruption there can quickly ripple through global energy markets.
According to GEM, South Asia currently accounts for 17% of global LNG import capacity under development, equivalent to 110.7 million tonnes per year, while the region also represents 17% of global gas pipeline expansion, or around 34,146 kilometres.
Bangladesh and Pakistan are planning LNG import facilities that could nearly double their existing capacity, while India is pursuing the world’s second-largest LNG terminal expansion and the third-largest gas pipeline construction programme.
“South Asian economies that rely on LNG imports will struggle to cope with these price shocks,” said Robert Rozansky, global LNG analyst at Global Energy Monitor. “It is a reminder of the risks of building new gas infrastructure and shows that domestic alternatives like renewable energy are more affordable and reliable in the long run.”
The report notes that LNG infrastructure projects in the region have already faced instability. Over the past decade, India, Bangladesh and Pakistan have cancelled or shelved two to three times more LNG import capacity than they have successfully completed, reflecting financial and policy uncertainties.
Proposed LNG terminals in South Asia also show higher failure rates than similar projects in Europe.
For emerging economies heavily reliant on imported LNG, sudden price spikes can translate into higher electricity tariffs, industrial disruptions and growing pressure on public finances.
Bangladesh in particular remains exposed to global energy market swings because of its dependence on imported fuel for power generation and industry.
Shafiqul Alam, lead energy analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis (IEEFA), said the country’s LNG experience has been highly volatile.
Gas tariffs across sectors rose by up to 271% between January 2023 and April 2025, he said, while expensive spot purchases have increased the government’s subsidy burden.
“The expectation that LNG would provide an affordable alternative to declining domestic gas has instead exposed Bangladesh to unstable global markets,” Alam said, adding that renewable energy could provide a more reliable hedge against fossil-fuel price shocks.
Renewable energy deployment is already accelerating in the region. Solar generation in Pakistan has more than tripled in the past three years, while India is expected to meet more than 40% of its electricity demand from renewables by 2030.
GEM analysts say emerging technologies such as energy storage systems and green hydrogen could further reduce the region’s dependence on imported gas as they mature.
Julie Joly, director of the oil and gas programme at Global Energy Monitor, said the current geopolitical turmoil underscored the need for a strategic shift.
“As LNG prices rise and supply tightens following the US attack on Iran, it would be a forward-looking decision for Bangladesh’s new government to move away from LNG and toward renewable energy,” she said. “Renewables can provide the energy security that LNG clearly cannot.”