Gas reserves running out: only 7.63 TCF left to extract as costly LNG imports strain the budget

Bangladesh's recoverable natural gas reserves are shrinking fast. Of the roughly 30 trillion cubic feet (TCF) of proven recoverable reserves, about 74% has already been extracted. Unless a major new gas field is discovered, the existing fields may be able to supply gas for at most another eight years, geological and energy analyses indicate.

A review of various government and institutional statistics shows that the country's total recoverable gas reserves stood at about 29.74 TCF. Of that, some 22.11 TCF had been extracted by December 2025. Only 7.63 TCF now remains — about 26% of the original reserves.

The production trend points the same way. According to the Hydrocarbon Unit, in the 2015-16 fiscal year domestic and foreign companies together supplied an average of about 2,660 million cubic feet of gas per day; in May 2015 that figure peaked at 2,786 million cubic feet. Daily production has now fallen to about 1,620 million cubic feet — a decline of more than 39% in a decade. Production is currently dropping at an average rate of about 150 million cubic feet a year, mainly because the older fields are depleting and pressure in working wells is falling.

At Bibiyana, the country's main gas-supplying field, daily production was about 1,175 million cubic feet a decade ago; it has now dropped to about 732 million cubic feet. According to data from last June, more than 57% of total gas production (28 billion cubic feet) came from 42 wells operated by international oil companies, while the state-owned companies' 70 wells produced only 21 billion cubic feet.

Against this steep fall in production, demand for gas in the country keeps rising — and the supply crisis has become severe across the power, industrial and residential sectors alike.

The country's gas-based power plants have a combined generation capacity of 12,472 megawatts, but because of the acute gas shortage, more than half of that capacity has to sit idle even at the peak of summer demand.

With new industrial gas connections suspended, about 1,857 applications from industrial enterprises are currently lying unresolved with the gas distribution companies. Many gas-dependent factories are having to bear huge financial costs to switch to alternative fuels or convert their boilers and machinery.

On the residential side, new connections have been closed since 2015, and low pressure in the transmission lines is also severely disrupting CNG supplies for the transport sector.

To close this vast gap between demand and supply, Bangladesh began importing liquefied natural gas (LNG) in 2018. Two floating terminals (FSRUs) now provide regasification capacity of about 1,100 million cubic feet a day, and more than 35% of total daily gas supply comes from imported LNG.

But the cost gap between domestic gas and imported LNG is stark. Extracting gas from a domestic well costs about 12 to 15 taka per cubic metre. By contrast, if LNG costs $30 per MMBtu on the international market, each cubic metre of imported gas costs about 127 taka — nearly ten times the cost of domestic gas.

Recent geopolitical tensions in the Middle East have pushed LNG prices in the international spot market sharply upward. The Asian benchmark price (JKM) has crossed $32 per MMBtu — the highest since December 2022 — multiplying the import bill.

This international volatility has put the LNG import subsidy allocation in the national budget under severe pressure. Although 6,000 crore taka was allocated for this purpose in the current fiscal year, about 10,000 crore taka was spent in the first three months alone. If the global price rise persists, subsidy spending is feared to exceed the allocation several times over.

To meet the shortfall, the Energy Division has adopted medium- and long-term plans to raise daily gas supply capacity to 5,819 million cubic feet by 2030 and to 8,000 million cubic feet by 2035.

Short-term initiatives include a land-based terminal at Matarbari with capacity of 1,000 million cubic feet a day, a floating terminal at Kutubjom with 600 million cubic feet of capacity, construction of the 96-kilometre Feni-Bakhrabad transmission pipeline, and drilling 150 new wells.

The long-term plans include three more floating terminals, diversifying import sources, a proposal to import gas from Myanmar by pipeline, and drilling a further 150 wells. International tenders have also been invited for offshore oil and gas exploration in 26 blocks in the Bay of Bengal. However, discovering new reserves offshore and linking them to the national grid is time-consuming — the benefits could take at least seven to ten years to arrive.

Energy analysts say excessive dependence on the expensive and volatile international LNG market is creating major risks for the overall economy, foreign exchange reserves and power and energy prices. Alongside expanding import-dependent infrastructure, they warn, unless effective emphasis is placed on quickly developing and exploring undiscovered and relatively underused domestic fields — such as the prospective Bhola and Chhatak East fields — future energy security could fall into deep crisis.