Bangladesh seeks long-term energy security with Russian gas, talks on LNG imports from Sakhalin-2 and Portovaya

Bangladesh wants to ensure long-term supplies of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) from Russia to meet the country's growing energy demand. The two countries have discussed the possibility of an ethane-rich gas processing complex for this purpose.

Imports of gas from Russia's Sakhalin-2 project and the Portovaya LNG plant also received importance in the discussion. Alongside energy cooperation, the two countries discussed building an alternative payment system to make commercial transactions easier.

These issues came up at the fifth meeting of the Bangladesh-Russia Intergovernmental Commission (IGC) on trade, economic, scientific and technological cooperation last Thursday (5 November).

Officials of the Europe Wing of the Economic Relations Division (ERD) took part in the meeting for Bangladesh. The Russian delegation was led by Ilya Shestakov, head of Russia's Federal Agency for Fisheries and chairman of the Russian part of the commission.

At the meeting, Russian energy company Gazprom said it is ready to facilitate direct talks between Petrobangla and Sakhalin Energy on supplying LNG from the Sakhalin-2 project if Bangladesh is interested.

The possibility of supplying LNG from the Ust-Luga plant and importing gas from the Portovaya LNG plant was also discussed. The two sides reviewed the possibility of supplying LNG and LPG as part of an ethane-rich gas processing complex. These initiatives are considered important for ensuring long-term supplies to meet Bangladesh's energy demand and for expanding cooperation between the two countries in the energy sector.

Alongside energy cooperation, Russia laid emphasis on building an alternative system to settle commercial transactions between the two countries. Western sanctions have created complications for transactions with Russian banks through conventional international banking channels.

Increasing direct contact between Russian banks and Bangladeshi financial institutions, using digital financial instruments and building alternative payment infrastructure were discussed at the meeting.

According to an ERD working paper, the Eximbank of Russia, under the Russian Export Center Group, is interested in increasing cooperation with Bangladeshi financial institutions. However, as the institution and its parent organisation are under US sanctions, there are legal and financial complications for direct cooperation.

Bangladesh Bank sources said money kept in Sonali Bank for repayment of Russian loans cannot be transferred to the Russian bank concerned because of sanctions. Making instalment payments for the Rooppur Nuclear Power Plant loan uninterrupted is therefore also one of the reasons for building an alternative system.

According to Bangladesh Bank's import payment figures, Bangladesh paid $1.3625 billion for imports of goods from Russia in the 2024-25 fiscal year.

The Rooppur Nuclear Power Plant is one of the biggest projects of economic and technological cooperation between the two countries. A state export credit agreement for technical and financial assistance to build the plant was signed on January 15, 2013. Russia's state institution Gazprom has also been working on gas exploration in Bangladesh since 2012. Alongside drilling several wells in Bhola, the institution identified five more wells for exploration in 2023.

Russia is also an important partner of Bangladesh in agriculture and food security. In particular, there is a long-standing commercial relationship with the country for imports of wheat and potash fertiliser. Increasing fertiliser supplies, joint initiatives in agricultural research and expanding cooperation in the industrial and agricultural sectors were discussed at this meeting.

A recommendation was made to take an initiative to sign a memorandum of understanding on cooperation and information exchange between Russia's state development corporation VEB.RF and Invest Bangladesh to increase trade and investment. Bangladesh laid emphasis on using opportunities to export pharmaceuticals, leather goods, jute and jute goods, ceramics and manpower alongside readymade garments.

Preparation for signing an agreement on customs cooperation and mutual assistance, allocating quotas for Bangladeshi students at Russian higher education institutions, and exchanging experience in science and technology were also discussed.

An ERD official said representatives of the two countries reviewed various fields of bilateral cooperation at the meeting, including banking and financial transactions, energy, agriculture, industry, education, science and technology.