How Can LNG Security Be Ensured?

Natural gas is central to Bangladesh’s energy system. Electricity generation, industries, fertiliser production and commercial establishments all depend heavily on gas. But domestic gas production is not keeping pace with demand. As a result, liquefied natural gas (LNG) has become an essential part of the country’s energy system.

Bangladesh began importing LNG commercially in 2018 and has since become increasingly dependent on imported gas. Two floating storage and regasification units (FSRUs) are operating in Maheshkhali, while plans are underway for new terminals and land-based LNG infrastructure at Matarbari. There are also plans to increase strategic fuel storage capacity.

But can energy security be ensured simply by increasing the number of terminals and importing more LNG?

Energy security means more than the ability to purchase sufficient fuel. It also means being able to maintain supplies during a crisis. What happens if a terminal becomes inoperative? What if a supplier fails to deliver a cargo? How can alternative supplies be arranged if a key sea route is disrupted? These are all part of energy security. For Bangladesh, strengthening the flexibility and resilience of the LNG supply system should therefore be a priority.

LNG terminals are a vital link between the international energy market and Bangladesh’s national gas grid. LNG arrives by ship in liquid form, is regasified at the terminal and then enters the national gas system through pipelines. Any major problem at a terminal can therefore quickly affect the wider gas supply.

A fire and equipment problems at an LNG terminal in Maheshkhali in July 2026 disrupted supplies and highlighted this vulnerability. Although supplies later partially resumed, the incident showed the risks of excessive dependence on a single facility. If additional supplies can be obtained from another terminal, adequate reserves are available or a new cargo can be brought in quickly, the impact can be contained. Without such alternatives, a problem at one facility could develop into a major national gas crisis.

Flexibility means being able to quickly change the source, volume, timing or purchasing method when circumstances change. If a cargo from one supplier is disrupted, an alternative supplier should be available. If one terminal becomes unavailable, another should be capable of handling additional supplies. Emergency purchases and reserve stocks are also necessary during sudden international market disruptions.

A resilient LNG system therefore requires multiple suppliers, several terminals, adequate reserves, flexible contracts and alternative transportation arrangements.

Long-term LNG contracts are important for an import-dependent country like Bangladesh. They provide a stable supply base and help secure fuel amid international market uncertainty. But they are not sufficient on their own. Gas demand varies with electricity generation, industrial production, weather, economic growth and international market conditions.

Bangladesh therefore needs a combination of long-, medium- and short-term contracts, along with the option of purchasing cargoes from the spot market when necessary. Contracts should also provide commercial flexibility in cargo volumes, delivery schedules and, where possible, destinations. Such flexibility may increase costs in some cases, but it can strengthen the ability to respond to supply disruptions. Energy security should therefore be assessed not only by the price of LNG but also by the potential economic cost of supply interruptions.

The experience of major LNG-importing countries in Asia offers useful lessons. Japan has combined long-term contracts with flexibility in supply sources and contract terms. India has developed multiple regasification terminals in different regions, allowing alternative facilities to be used when one encounters problems. This geographical diversification is particularly relevant for Bangladesh. Singapore has integrated LNG infrastructure with wider energy trading and regional management. Bangladesh’s location along the Bay of Bengal also creates scope to explore similar opportunities.

China has combined LNG, pipeline gas and domestic production from different sources. The lesson for Bangladesh is that LNG should not be treated as the sole answer to its energy needs, but as part of a diversified energy system.

Bangladesh may need both floating and land-based terminals. Floating terminals can be installed relatively quickly and are useful for increasing capacity in the short and medium term. Land-based terminals offer greater scope for large-scale storage, which is important for long-term supply security. Future planning should therefore consider both options according to need.

However, simply increasing the number of terminals will not be enough. New facilities must be connected to the national gas grid in a way that allows supplies from other regions when infrastructure in one area faces disruption.

Storage is another key issue. During an international market crisis or a temporary terminal shutdown, additional reserves can provide an important buffer, even for a few days. Future planning should therefore consider not only how many million cubic feet per day can be supplied, but also how many days of demand can be met during an emergency. Strategic reserves should be developed on that basis.

Qatar and Oman are important LNG suppliers to Bangladesh. The country could also maintain access to other producers, including the United States. Supply risks are not limited to producer countries. Geopolitical tensions in the Middle East, maritime security, shipping, insurance costs and international prices can all affect the cost and delivery time of LNG cargoes. Maritime route risks must therefore be included in energy security planning.

Most importantly, LNG cannot be Bangladesh’s sole long-term energy solution. Rising international LNG prices put pressure on the country’s foreign-exchange reserves. Alongside LNG imports, Bangladesh must therefore continue domestic gas exploration, renewable energy development, energy efficiency and power-sector modernisation.

Bangladesh’s LNG infrastructure will expand further in the coming years. But one principle must remain clear: a failure at one facility should not bring the entire system to a standstill. Future LNG policy should therefore focus on multiple terminals, diverse suppliers, flexible purchasing arrangements, strategic reserves and a diversified energy system.

Author: Engineer