Securing Bangladesh’s energy future

In recent weeks, energy has dominated headlines, seminars and market discussions, not only in Bangladesh but across the world. Securing reliable energy resources is critical, as it will determine how economies prosper in the years ahead.

Over the past six fiscal years, domestic gas production in Bangladesh has declined by about 30 percent. This sharp fall has increased dependence on imported liquefied natural gas. According to Petrobangla’s daily production data, available on the Energy and Mineral Resources Division’s website, the downward trend continues in 2026, with domestic output hovering between 1,700 and 1,750 million cubic feet per day. The Hydrocarbon Unit annual report for 2024-25 shows that gas consumption was led by the power sector at 41 percent, followed by industry at 19 percent, captive power at 17 percent, domestic users at 11 percent and fertiliser at 6 percent. The remainder is consumed by CNG and commercial users.

To strengthen onshore energy security, Bangladesh needs a comprehensive asset plan to unlock the full potential of each gas field. Robust planning and better use of technology can improve turnaround efficiency. Each asset should also undertake a systematic review to identify additional resources that could be converted into reserves and ultimately into production. This exercise should initially be carried out without constraints such as gas pricing, costs or budget limits. The opportunities identified can then be prioritised and escalated so that any barriers are addressed swiftly. LNG spot prices are currently several times higher than domestic gas. Given this wide gap, accelerating onshore opportunities must be a central part of the country’s broader energy security strategy.

Offshore exploration presents a different challenge. International oil companies must be offered competitive fiscal incentives; otherwise, each bid round risks falling behind schedule. The past few years have seen significant technological advances, including modern ocean bottom node seismic surveys, the use of artificial intelligence for faster prospect maturation and improved imaging, and the drilling of high-pressure 20,000 PSI wells in projects such as Anchor in the United States. There are also more cost-effective tieback solutions for smaller discoveries and greater use of advanced remote operations. Bangladesh must align itself with these global shifts.

It is equally important to understand how global LNG trade flows are evolving. Asia accounts for most of the world’s demand. Europe, once heavily dependent on Russia, has shifted rapidly since the Russia-Ukraine war and now relies increasingly on LNG from the United States. According to the American Petroleum Institute, between January and April 2025, a record 67 percent of US LNG exports went to the European Union and the United Kingdom. This trend is likely to continue in the near term.

The International Energy Agency reports that in 2025, Bangladesh, India and Pakistan imported almost two-thirds of their LNG through the Strait of Hormuz. With contracted LNG volumes now affected, Bangladesh has become more exposed to the volatile spot market. Recent media reports suggest the country has secured several LNG cargoes for April, but this remains a short-term fix. As Bangladesh competes with other Asian buyers for LNG, limiting exposure to spot prices should be a strategic priority. Alongside Qatar, the country needs backup term contracts with suppliers outside the Middle East to diversify risk.

Securing Bangladesh’s energy future will require a hybrid approach. Onshore production must be sustained and extended through both national companies and international partners. Power sector reforms should include incentives for solar and faster progress in other renewables. Storage capacity for crude oil and refined products needs expansion. Offshore blocks must attract credible investors. Above all, gas demand and supply must be balanced through longer-term LNG contracts sourced from multiple regions.

The writer is an energy professional. He can be reached at sshamsu@alumni.harvard.edu