Gas Crisis Deepens as LNG Terminal Shutdown Squeezes Bangladesh's Power Grid

Bangladesh's energy sector is grappling with a deepening gas shortage after the critical floating liquefied natural gas (LNG) terminal, operated by Excelerate Energy, experienced an unexpected shutdown. This outage has triggered a sharp drop in gas supply to the national grid, intensifying the country's energy woes and leading to widespread electricity shortfalls, according to officials at Petrobangla, the state-owned oil, gas, and mineral corporation.

Widespread Impact on Power Generation and Industry

The operational disruption at the Excelerate Energy terminal has severely impacted the national energy supply. Regasified liquefied natural gas (RLNG) supply to the grid has plummeted by approximately 550 million cubic feet per day (mmcfd) since the terminal went offline. This significant reduction has directly translated into a substantial deficit in power generation, with the evening power shortfall climbing to roughly 962 megawatts across the country. Consequently, authorities have been forced to implement wider load shedding across both urban and rural areas, despite efforts to ramp up electricity generation from coal and liquid-fuel plants.

State-run power distributors have confirmed that critical gas-fired power plants, including the major Meghnaghat facility and several other units, have had to drastically curtail their output due to insufficient gas flow. This has not only affected residential consumers but has also left industrial users among the hardest hit, reporting production slowdowns and disruptions to their operations. Businesses in key economic hubs like Dhaka and Chattogram have particularly felt the brunt of unscheduled power outages, impacting manufacturing and other industrial activities.

Government Mobilises Emergency Measures

In response to the escalating crisis, the Bangladeshi government, through its energy ministry, has initiated several emergency measures aimed at mitigating the immediate shortfall and ensuring future energy security. The priority is the swift restoration of the Excelerate Energy terminal, with spare parts for the facility being fast-tracked for import to enable urgent repairs and bring its full capacity back online. This critical infrastructure is vital for the country's LNG import capabilities, making its rapid repair paramount.

• Spare parts for the floating LNG terminal are being fast-tracked for import to restore capacity, according to the energy ministry.
• The government has approved purchase of an emergency LNG cargo at $22.35 per MMBtu to ease the shortfall.
• A 13-year LNG import deal has been secured with a US supplier to bolster long-term supply security, officials confirmed.

Alongside terminal repairs, the government has moved to secure additional gas supplies, approving the immediate purchase of an emergency LNG cargo at a price of $22.35 per MMBtu to help bridge the current supply gap. Furthermore, demonstrating a proactive approach to long-term energy planning, officials have confirmed the finalisation of a 13-year LNG import deal with a US supplier, aiming to bolster the nation's energy security and reduce volatility in future gas supplies. These actions underscore the urgency with which the government is addressing both the immediate crisis and the broader challenges of energy independence.

Outlook and Future Challenges

Energy analysts caution that the current crisis highlights Bangladesh's persistent reliance on imported LNG, despite ongoing efforts to diversify domestic gas exploration and production. While investments in local exploration are crucial for long-term self-sufficiency, the country remains vulnerable to disruptions in global supply chains and international energy markets. The state-run Bangladesh Petroleum Corporation (BPC) has indicated that it expects gas supply to stabilise gradually over the coming weeks as emergency cargoes arrive and repair work on the Excelerate Energy terminal progresses.

However, the BPC also issued a caveat, acknowledging that rolling outages could persist during peak demand periods even as the situation improves. This suggests that while immediate measures are in place, the path to a fully stable and secure energy supply will require sustained effort and strategic planning to overcome both infrastructural vulnerabilities and dependence on volatile global energy markets. The incident serves as a stark reminder of the complexities inherent in managing a rapidly growing economy's energy demands.