Bangladesh is asking major liquefied natural gas (LNG) suppliers to withdraw force majeure declarations imposed during the recent Iran-US-Israel conflict, after the disruption forced the country to purchase expensive spot cargoes and added an estimated Tk106 billion to its energy subsidy burden.
Md Abdul Mannan, acting chairman of state-owned Petrobangla, said the company would formally request QatarEnergy, Oman-based OQ Trading and US-based Excelerate Energy to immediately lift the force majeure notices that suspended contracted LNG deliveries until 16 July.
“We will write separate letters to the suppliers requesting them to withdraw the force majeure immediately, as it has significantly affected our economy during the conflict,” Mannan told Just Energy News.
According to Petrobangla, the suppliers cited concerns over potential supply disruptions arising from hostilities involving Iran, Israel and the United States. Bangladeshi officials now argue that with the ceasefire holding, the justification for the restrictions no longer exists.
The suspension of long-term contracted supplies forced Bangladesh to replace 29 cargoes with significantly more expensive LNG purchased on the spot market.
Of the disrupted cargoes, QatarEnergy suspended 12 shipments, OQ Trading seven, while additional cargoes were affected by force majeure declarations from Excelerate Energy, Saudi Arabia’s Aramco and EGML.
Petrobangla imported a total of 113 LNG cargoes during fiscal year 2025-26. Of these, 29 cargoes were procured from the spot market at prices ranging between US$16.34 and US$28 per million British thermal units (MMBtu), substantially higher than Bangladesh’s long-term contract prices.
Under a 15-year LNG Sales and Purchase Agreement signed with QatarGas in 2017, Bangladesh imports between 1.8 million and 2.5 million tonnes per annum (MTPA) of LNG at a price linked to Brent crude, calculated as 12.65% of Brent plus US$0.50 per MMBtu.
A second long-term agreement signed with QatarEnergy in 2023 provides for the supply of 1.5 MTPA, with pricing set at 13.25% of Brent crude. Deliveries under that contract began this year.
The government initially allocated Tk60 billion in LNG subsidies for fiscal year 2025-26. However, the subsidy requirement has surged to Tk166 billion due to the increased reliance on volatile spot-market purchases.
“The Iran war has added Tk106 billion in additional subsidy requirements as most long-term suppliers have maintained force majeure since March, forcing us to rely on expensive spot purchases,” said A K M Mizanur Rahman, Petrobangla’s Director (Finance).
He added that Petrobangla had already received Tk141 billion from the government and expected the remaining Tk25 billion to be released in the coming months.
QatarEnergy invoked force majeure on 2 March, followed by OQ Trading on 5 March and Excelerate Energy on 6 March, according to Petrobangla.
To reduce future supply risks, Bangladesh has signed memoranda of understanding with the United States, Australia and Angola to explore alternative LNG procurement options. Officials said negotiations were also under way with Mozambique.
“We have already signed deals with the US, Australia and Angola, and we plan to sign a similar agreement with Mozambique,” a senior energy official said.
Petrobangla forecasts that it may need to procure as many as 75 LNG cargoes from the spot market in the coming year, raising concerns over further increases in import costs if global prices remain elevated.
Bangladesh currently supplies around 2.6 billion cubic feet of natural gas per day against estimated demand of 3.6 billion cubic feet. Approximately 40% of the country’s gas supply is met through imported LNG, underscoring the growing importance of secure and affordable LNG imports to the country’s energy security and economic stability.