Chevron Bangladesh has confirmed it will proceed with the much-anticipated Jalalabad Compression Project (JBC), following Petrobangla’s settlement of outstanding arrears in April this year.
In a letter dated June 22, addressed to the Director (Finance) of Bangladesh Oil, Gas and Mineral Corporation (Petrobangla), Chevron Bangladesh President Eric M. Walker stated that the decision to resume the project came after Petrobangla fulfilled its previous payment obligations.
However, Chevron made it clear that the project’s continuation remains conditional on Petrobangla staying current with monthly payments for gas and condensate. In addition, the company expects all outstanding late payment interest, estimated at approximately US$30 million, to be cleared by September 30, 2025, according to official sources.
Chevron expressed optimism that the resolution of long-standing financial issues would pave the way for further investment and help unlock additional natural gas resources critical to Bangladesh’s energy future.
Petrobangla Clears Dues, Pushes for Project Restart
On April 20, 2025, Petrobangla formally requested Chevron to resume the delayed project, after clearing all pending dues that had stalled progress.
In its letter, Petrobangla stated that it had paid a total of US$183.83 million in outstanding dues within the agreed six-month window, from November 2024 to April 2025, despite significant challenges stemming from the prolonged foreign currency crisis that began in mid-2022.
“Thanks to the current government’s fair, transparent, and accountable policies, the foreign currency situation has significantly improved,” the letter read. “In this context, Petrobangla has cleared all outstanding arrears, including regular invoices, within the committed time frame.”
Chevron had suspended the project in April 2024, citing non-payment. Now that the dues have been settled, Petrobangla expects Chevron to resume work without further delay.
According to Petrobngla officials, successful implementation of the Jalalabad Compression Project would allow the extraction of an additional 352 billion cubic feet (BCF) of gas from the Jalalabad field, an important step toward reversing the current production decline.
Petrobangla cautioned that delays in implementing the project could undermine the purpose of recent extensions of production-sharing contracts for Blocks 13 and 14.
“Timely execution of this project is crucial to strengthening Bangladesh’s energy security and maintaining output from domestic gas fields,” the letter emphasized. “We urge Chevron to restart work at the earliest opportunity.”
Project Timeline and Strategic Importance
According to officials, the Jalalabad Compression Project is expected to take a minimum of three years to complete, backed by Chevron’s $65 million funding commitment.
“We received official confirmation from Chevron last Sunday regarding the project’s resumption,” said A K M Mizanur Rahman, Director (Finance) of Petrobangla, speaking to Just Energy News.
Chevron Bangladesh Block Twelve Ltd. and Chevron Bangladesh Blocks Thirteen & Fourteen Ltd. currently account for approximately 60 percent of Bangladesh’s total gas production and over 83 percent of domestic condensate output.
The Jalalabad Compression Project is considered vital for sustaining national energy supply and supporting economic growth through enhanced domestic resource development.