The outstanding dues of Bangladesh Oil, Gas and Mineral Corporation, also known as Petrobangla, in the natural gas sector have dropped to $400 million, easing the financial strain on the state-owned entity.
Petrobangla’s sources have confirmed that despite previous concerns, no disruption in importing liquefied natural gas (LNG) is expected during the upcoming winter.
According to Petrobangla officials, the recent LNG supply issues were the results of technical problems, including damage to Summit Group’s Floating Storage Regasification Unit (FSRU) caused by Cyclone Remal.
While the damage has been repaired, the gas supply from Summit's LNG terminal has not yet resumed. On September 12, Summit Group announced that it has completed the repair of its FSRU, known as LNG Terminal, but it will take 20 more days to get service from the facility as Petrobangla needs time to import LNG.
As of last week, Petrobangla owed $215 million to US company Chevron and British company Tullow for gas supplies, according to the accounts department of Petrobangla. Additionally, $300 million was due for LNG imports.
Following swift government intervention, the total outstanding amount has been reduced to $400 million, with officials expecting further reductions in the coming week.
Recently, Petrobangla Chairman Zanendra Nath Sarker said, “Petrobangla is working closely with the energy adviser, finance adviser and the governor of Bangladesh Bank. Their advice and coordination have played a key role in reducing the accumulated dues.”
At the beginning of this year, Petrobangla owed more than $800 million to various partners for gas purchases. To manage the LNG imports, the Awami League government secured a loan from the International Islamic Trade Finance Corporation (ITFC).
Despite this, Petrobangla's liabilities continued to rise. However, following the recent changes in government, the company’s financial burdens have started to ease.
Petrobangla also reported that the country’s daily gas demand stands at around 4,000 million cubic feet, while supply is limited to 3,100 million cubic feet. Of this, 1,100 million cubic feet are imported through long-term contracts and spot markets, with the remainder sourced domestically.
Chevron and Tullow, two foreign companies, extract and supply gas under Production Sharing Contracts (PSC) with the government and Petrobangla is responsible for purchasing this gas while raising dues to these companies has been a growing concern.
To address this gas shortage, Petrobangla has advanced the import of an LNG cargo from Qatar, originally scheduled to arrive in December.
Additionally, Petrobangla is also increasing its offshore and onshore exploration efforts, with a plan to drill 100 wells by 2028. Chairman Zanendra Nath Sarker mentioned that this project is expected to be completed between 2026 and 2028 at a cost of Tk 20,000 crore.
Of this, Tk 7,000 crore will be financed from Petrobangla’s funds, while the government has been asked to provide Tk 3,500 crore annually for the remainder.
