Bangladesh’s energy sector is facing mounting pressure after an Iranian missile strike damaged liquefied natural gas (LNG) infrastructure in Qatar’s Ras Laffan Industrial City, disrupting supplies to the country.
Officials at Petrobangla said at least seven LNG cargoes scheduled for Bangladesh have already been cancelled, forcing the country to turn to higher-priced alternatives in the spot market.
Analysts warn that the shift could significantly increase subsidy burdens and strain electricity generation during peak summer demand.
Heavy reliance on Qatar
Bangladesh depends heavily on Qatar for LNG, with 50% to 75% of its imports sourced from the Gulf nation in different years.
Under long-term agreements, Qatar supplies between 3.6 and 4.3 million tons annually out of Bangladesh’s total LNG imports of around 6 million tons.
Additional supplies come from Oman, while shortfalls are met through purchases from the spot market.
According to QatarEnergy, the attack damaged two LNG processing trains and a gas-to-liquids facility, forcing a shutdown of operations.
Qatar has indicated that partial supply may resume within two weeks, though full normalization could take up to a month. Industry estimates, however, suggest recovery may take longer.
Ras Laffan accounts for roughly 17% of global LNG supply, meaning the disruption is expected to tighten the international market and affect major importers such as China and India.
Rising costs and subsidy pressure
Global LNG prices have surged amid the conflict. In early March, prices ranged between $15 and $18 per MMBTU. Following the escalation, they rose to $20–$22 and have recently climbed to $30–$35.
In contrast, LNG imported under long-term contracts from Qatar and Oman costs Bangladesh around $14 per MMBTU.
Officials say sourcing LNG from the spot market at elevated prices could significantly increase subsidy requirements, particularly in the power sector.
The government already allocates around Tk40,000 crore annually in power subsidies, a large portion of which is linked to LNG-based electricity generation.
Risk of supply shortages
Energy experts warn that prolonged disruption could lead to gas shortages, triggering load shedding and disrupting industrial production.
The timing is critical, as demand for gas typically rises during summer due to increased electricity use and irrigation needs.
To manage rising import costs, the government has reportedly sought around $2 billion in emergency financing, including $1.3 billion from the International Monetary Fund and $700 million from the Asian Development Bank.
There are also concerns that instability in the Middle East could affect Bangladeshi workers in the region, potentially impacting remittance inflows.
Qatar has declared force majeure following the damage, allowing it to suspend supply obligations under long-term contracts.
Industry experts note that such clauses limit Bangladesh’s ability to seek compensation during extraordinary events such as conflict or natural disasters.
Expert and official response
Energy expert M Tamim said the disruption could have a prolonged impact.
“We are facing a long-term disruption. It may take several months to restore full capacity at Ras Laffan. In the meantime, Bangladesh will have to rely on alternative sources, including the spot market, which will increase costs,” he said.
Petrobangla Chairman Erfanul Haque confirmed that QatarEnergy has declared force majeure on supplies to Bangladesh until April 18.
“To meet rising demand, particularly in April, we have no alternative but to procure LNG from the spot market,” he said, adding that efforts are underway to source LNG from countries including Australia and explore new long-term agreements.
He noted that both price and availability remain uncertain.
Experts say the extent of the impact will depend on how quickly Qatar restores production and whether tensions in the Middle East escalate further.
If disruptions persist, Bangladesh’s energy sector could face sustained financial and operational pressure in the months ahead.
