Dhaka, March 20 (IANS) Bangladesh’s dependency on import of Liquefied Natural Gas (LNG) is facing a major disruption due to a liquidity crunch forcing the interim government led by Muhammad Yunus to seek a US$ 350 million loan – equivalent to 42.70 billion Bangladeshi taka – for LNG purchases in the next fiscal due to persistent dollar shortages, local media reported on Thursday.
The government’s Energy and Mineral Resources Division and Bangladesh Oil, Gas, and Mineral Resources Corporation (Petrobangla), revealed that the loan process has already begun with technical assistance from the World Bank, which will act as a guarantor, reported Bangladesh’s leading Bengali daily Prothom Alo quoting sources.
As domestic gas production has been steadily declining, the interim government is relying on LNG imports. Meanwhile, the government owes a huge sum of money to foreign companies. The US company Chevron, Bangladesh’s largest gas producer, is owed over US $150 million, while outstanding LNG payments have surpassed US$ 200 million. As arrears continue to mount, foreign suppliers are becoming reluctant to deliver LNG shipments. The ongoing dollar crisis has made it difficult to settle the import bills, several reports cited.
However, experts argue that prioritising LNG imports over domestic gas exploration has put Bangladesh’s energy sector at risk. They warned that while borrowing may provide a short-term relief, it fails to address the root problem and will only create further financial strain. It stated that instead of relying on loans to pay for imports, the government must focus on sustainable energy solutions.
Bangladesh’s Financial Express reported that the country will have to depend more on volatile spot market in 2025 and import costly LNG to feed mounting demands from industries, power plants and other gas-guzzling consumers as domestic natural gas output is on the wane.
A senior Petrobangla official said that it has been planned to import a total of 115 LNG cargoes — 59 from spot market and 56 from long-term suppliers, which marks a 33.72 per cent increase compared to that of the previous year.
Last November, a report by Market Forces, Waterkeepers Bangladesh, and Dhoritri Rokkhay Amra (DHORA) had warned that Bangladesh’s proposed LNG power projects and import terminals could cost the country’s economy US$ 50 billion.
“The report highlights that of the US$ 50 billion allocated for LNG, US$ 36 billion could instead finance 62 gigawatts of renewable power generation, more than twice Bangladesh’s current electricity capacity, making the country a potential clean energy leader,” Bangladesh’s Business Standard reported, last year.
It added that foreign interests, including major firms from US and Japan, continue to drive LNG expansion in Bangladesh, risking severe environmental harm.
–IANS
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