Bangladesh imports nearly all its liquefied natural gas through two floating terminals. On July 21, one of them caught fire.
The Terminal That Went Dark
The fault struck Excelerate Energy’s floating storage and regasification unit off Moheshkhali, damaging cables and a boiler and knocking out roughly 450 million cubic feet of gas a day, according to The Business Standard. Motorists queued five to eight hours at CNG stations in Chattogram. Households lost cooking gas for days at a stretch. The terminal did not return to even partial service until Aug. 6, when it restarted on a single boiler and began sending about 115 million cubic feet back into the grid, a Petrobangla deputy general manager said.
By Aug. 3, before that partial fix, pipeline gas supply nationally had fallen more than 17% from its pre-fault level of over 900 million cubic feet a day to around 700 million, according to The Daily Star. Gas-fired generation, which normally reaches about 5,200 megawatts, dropped to roughly 3,500. Sixty-two of the country’s 143 generating units were short of fuel. Peak shortfalls touched 3,000 megawatts in the early hours of a Sunday, and the Payra coal plant, a rare bright spot elsewhere in the system, was running at about half its 1,320-megawatt capacity for unrelated reasons.
The scramble was not a one-off. Petrobangla has had to ration gas among power plants, industries, fertilizer factories and households from a national supply pool that has been shrinking for years as domestic production declines, and a single terminal fault is enough to push an already-stretched system into a visible crisis rather than a routine shortfall. Rationing itself was routine. Losing half the country’s import capacity in a single stroke is what turned a chronic problem into national headlines for days.
None of this is new to Bangladesh, and that repetition is exactly the argument Summit Group chairman Muhammed Aziz Khan has been making since well before the July fire.
A Country Running on Two Ships
Bangladesh has exactly two operational FSRUs: Excelerate’s unit and a second one that Summit Power International has run at Moheshkhali since April 2019. Combined, they give the country about 7.5 million tons a year of regasification capacity, Khan told S&P Global Energy in April, months before the fire. Because the July disruption knocked out “roughly 450 million cubic feet per day, or half the LNG supply, from the national grid,” as The Daily Star later put it, the arithmetic points to Summit’s own terminal carrying the other half on its own for roughly two weeks. Neither Summit nor Petrobangla has published a real-time account of the Moheshkhali unit’s output during the outage, so that inference, while consistent with the reported numbers, stops short of a confirmed fact.
What is confirmed is the structural risk a two-terminal system carries. The same Daily Star analysis argued that a third FSRU “would reduce the impact of future technical failures by ensuring that the loss of a single terminal accounts for a smaller share of Bangladesh’s regasification capacity.” Right now, the loss of either terminal takes out half the country’s LNG import capacity in one stroke, whether the cause is a fire, a cyclone, or scheduled maintenance.
Khan made a version of that same point to S&P Global before anyone in Chattogram had queued for gas this summer. “Bangladesh is highly exposed,” he said. “It imports LNG through two operational FSRUs with a combined regasification capacity of about 7.5 million mt/year.” He framed diversification not as a hedge against one specific accident but as a response to a market that keeps producing new ones.
An Onshore Alternative, Still Waiting
A third import point does not have to float. Summit had proposed building Bangladesh’s first onshore LNG terminal at Matarbari Island, sized at 7.5 million tonnes a year, roughly matching the combined capacity of the country’s two existing FSRUs. That project stalled in 2024 after the interim government at the time repealed the law that had underpinned the tender, and Petrobangla canceled a shortlisting process that had already narrowed the field to eight bidders. Tokyo Gas, hired as a consultant in 2020, has since completed a feasibility study for the same site and prepared bid packages for whichever procurement route the government eventually chooses, but no open tender has been issued and talks over a possible government-to-government contract remain unresolved. An onshore terminal would not eliminate the concentration risk the July fire exposed, since it would still represent a single physical facility, but it would add capacity independent of the floating vessels that make up the entire current system, and it would do so without the two-to-three-year lead time of ordering and chartering a new FSRU.
What Khan Was Already Warning About
Months before the Moheshkhali fire, Khan had flagged a different kind of single point of failure: geography. “The Iran war has reminded the world once again that LNG is not only a commodity but a ‘geopolitical market,'” he told S&P Global, adding that “geopolitical risk today is setting both the floor and the volatility of LNG prices.” QatarEnergy had already suspended long-term LNG deliveries to Bangladesh under force majeure after tensions around the Strait of Hormuz disrupted shipping, he said. The country was pushed toward costlier spot-market cargoes as a result.
The cost of that exposure is not abstract. Bangladesh’s total LNG import bill ran to $3.88 billion across 109 cargoes in 2025. “That $3.88 billion can easily become $7 billion plus, which the country can ill afford,” Khan said, a scenario tied to sustained spot prices rather than the contracted rates Petrobangla’s long-term suppliers typically offer. During the March 2026 force majeure episode specifically, spot cargoes traded above $23 per million British thermal units, more than double the contracted rate, according to Marketrealist. Khan’s remedy is the same one he has offered for the terminal-concentration problem: buy from more places. “Bangladesh must strengthen energy security through diversification,” he told S&P Global. “This includes sourcing LNG from multiple regions beyond the Strait of Hormuz.”
A Louder Case for Privatization
Khan has paired that diversification argument with a structural one aimed at Bangladesh’s state gas-buying apparatus. He has pressed for corporatizing or partially privatizing the Bangladesh Petroleum Corporation and RPGCL, Petrobangla’s procurement arm, arguing the current arrangement is, in his words, “a policy choice, not a technical constraint,” Marketrealist reported. Shifting logistics and price risk onto private operators, he contends, would relieve a subsidy bill that is projected to grow 55% in the current fiscal year after electricity tariffs already climbed more than 20% the year before.
It is not an abstract pitch. Summit’s own private-sector power model, dating to 1997 when its first independent plant went into service, predates the state’s current LNG-procurement structure by more than two decades, and Khan points to it as evidence that private operators can run energy infrastructure Bangladesh’s public agencies have struggled to plan around. Summit’s Moheshkhali FSRU alone has delivered roughly 785 million million British thermal units to the national grid since it began operating, supply that did not depend on Petrobangla’s own contracting decisions.
The Government Is Already Moving, Just Not on Khan’s Timeline
The response described in Daily Inqilab’s recent roundup of Bangladesh’s power-generation troubles tracks closer to Khan’s prescription than officials may intend to admit. The report lists the current administration’s countermeasures: curbing irregularities in fuel procurement, importing both gas and electricity from a wider set of sources, and drafting longer-term infrastructure repair plans, alongside acknowledgment that electricity imports from India’s Adani Group have been reduced. None of that coverage mentions Summit or Khan by name. But diversifying suppliers and reducing reliance on any single import channel is precisely the fix Khan has been describing in interview after interview, months apart, to different outlets, about a problem that did not go away between April and August.
The math also gets less forgiving over time. Khan has told Platts that Bangladesh’s LNG imports are projected to reach 7.2 million metric tons in 2026, up from an estimated 6.8 million the year before, with the total climbing toward 15 million tons annually in the coming years if the economy keeps growing at 6% to 7%. A country importing 15 million tons a year through two terminals rated at a combined 7.5 million tons is a country running both vessels flat out with no spare capacity to absorb a fault at either one. Every year that passes without new import infrastructure narrows the margin for error the next fire, storm or mechanical failure will test.
Whether a third FSRU gets built, and who operates it, remains open. Petrobangla has not announced a procurement process for one, and Summit has not said publicly whether it would bid to build a second terminal of its own. What has changed since April is that the argument Khan made in the abstract now has a specific date attached to it: a fire on a single ship, on a single day in July, cut a country’s gas supply in half. The next disruption, whatever causes it, will test the same arithmetic again.