Bangladesh has suspended approvals for all new natural gas connections and requests for increased gas supply to existing customers, as declining domestic production and constraints on liquefied natural gas (LNG) imports intensify the country’s energy shortage.
State-owned Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) said in a circular issued on 17 July that the measure, ordered by the Energy and Mineral Resources Division (EMRD), would remain in force until further notice.
The directive requires all gas distribution companies to stop processing applications for new industrial and commercial gas connections, as well as requests for additional gas loads.
Petrobangla said the decision reflects a steady decline in output from Bangladesh’s ageing gas fields and reduced LNG import capacity. Only one of the country’s two Floating Storage and Regasification Units (FSRUs) is currently operational after the second terminal went offline last week, cutting daily gas supply by around 550 million cubic feet.
Bangladesh’s daily gas demand is estimated at about 4,000 million cubic feet per day (mmcfd), while current supply has fallen to roughly 2,150 mmcfd, according to the Energy and Mineral Resources Division. Domestic production has declined from around 2,800 mmcfd several years ago to approximately 1,650 mmcfd as reserves have become depleted.
The South Asian nation began importing LNG in 2018 through two floating import terminals with a combined regasification capacity of around 1,100 mmcfd. The outage at one terminal has further tightened supplies, resulting in widespread shortages affecting industries, power generation and other consumers.
The circular, signed by Md Mahamud Hasan, Deputy General Manager of Petrobangla’s Production and Marketing Division, was sent to the managing directors of all six state-owned gas distribution companies, including Titas Gas Transmission and Distribution PLC, Bakhrabad Gas Distribution Company Ltd and Karnaphuli Gas Distribution Company Ltd.
The latest restrictions come despite continued demand from investors seeking gas connections for new industrial projects.
Monir Hossain Chowdhury, spokesperson for the Energy and Mineral Resources Division, said authorities are continuing to assess applications already in the pipeline.
“We have around 2,500 pending applications from investors who have deposited the required fees and secured bank financing to establish industrial units,” he said. “These applications are being considered based on gas availability. New applications continue to be received and are reviewed in line with available supply.”
Bangladesh has spent around $3.65 billion on energy imports over the past six months as it seeks to offset declining domestic production with imported fuels, increasing pressure on the country’s foreign exchange reserves and energy budget, officials said.