LNG Terminal Fire Triggers Bangladesh Gas Crisis

Bangladesh has been dealing with a nationwide gas shortage since 21 July 2026, when a fire broke out on the floating storage and regasification unit (FSRU) operated by US-based Excelerate Energy off Moheshkhali Island in Cox's Bazar. The blaze burned for more than 15 minutes and destroyed power, control and instrumentation cables connected to the vessel's two boilers. Regasification stopped immediately. As of 28 July the terminal is still offline and Petrobangla has not committed to a firm restart date.

The outage removed between 450 and 500 million cubic feet per day (mmcfd) of gas from the national grid, close to 17 percent of total supply. Before the fire, the country's two floating terminals were regasifying around 1,000 to 1,050 mmcfd between them. That figure fell to roughly 500 mmcfd once the Excelerate unit stopped. Petrobangla data show total national supply at 2,151.7 mmcfd on 25 and 26 July against official demand of 3,854 mmcfd, meaning the state corporation is covering only about 56 percent of what the country needs.

Titas Gas Transmission and Distribution, which serves Dhaka and the surrounding districts, saw its daily volume drop to around 1,150 mmcfd from about 1,500 mmcfd, against demand near 1,900 mmcfd. The company, which supplies more than 2.7 million residential customers, issued a public apology and warned that low pressure would persist. Households in Mohammadpur, Dhanmondi, Kalabagan, Mirpur, Badda, Rampura and Basabo report stoves that will not light for most of the day. Many families have switched to electric hobs, induction cookers and LPG cylinders, while lower-income households have gone back to clay stoves and firewood. Some residents now cook after 21:00, when pressure recovers slightly.

Power generation has taken the heaviest single hit. Gas deliveries to power plants fell to around 700 mmcfd from a normal 950 to 1,000 mmcfd, cutting gas-fired output to roughly 4,500 MW from 5,500 to 6,000 MW. The Bangladesh Power Development Board puts the loss at 1,000 to 1,500 MW against recent peak output. On 25 July the power sector received 706.2 mmcfd against a stated requirement of 2,524.9 mmcfd, a coverage rate below 28 percent. Fertiliser plants received about 35 percent of their 329 mmcfd demand. Load shedding has spread well beyond the rural districts that usually absorb it.

Manufacturing is the part of the supply chain most exposed to the shortfall. Textile and knitwear factories need line pressure of about 10 PSI to run gas-fired generators and dyeing lines. Members of the Bangladesh Knitwear Manufacturers and Exporters Association report pressure of 1 to 2 PSI, and close to zero in some industrial belts. Mills in Gazipur, Narayanganj, Tongi and Savar are running at half capacity or less. One large group in Tongi's Pagar area told local media that switching to LPG, oil and grid electricity has raised its production costs by around 40 percent. The ceramic sector estimates monthly losses near Tk 300 crore. This matters well beyond Bangladesh, because ready-made garments account for more than 80 percent of national export earnings and feed European and North American apparel supply chains that run on tight delivery calendars.

The compressed natural gas retail network has been squeezed as well. Drivers in Dhaka have queued for three to four hours, and in some cases six or more, for partial fills worth as little as Tk 200. Several stations in Tejgaon, Malibagh and Motijheel suspended sales, with unavailability notices going up around 10:00 on 23 July. Fewer CNG auto-rickshaws are on the road and fares have risen. Station owners had called a strike for 30 July over the supply situation but withdrew it.

Technical teams from the United Kingdom and the United Arab Emirates have been working on the damaged unit since 23 July. The boilers themselves escaped direct damage, which officials describe as the reason the outage is being counted in weeks rather than months. The Energy and Mineral Resources Division has said that a few more minutes of fire could have put the FSRU out of service for six to twelve months. The obstacle now is parts. Replacement power, control and instrumentation cables are not available in Bangladesh in the quantities required and have to be sourced abroad. Once they arrive, engineers must retest the integration of the boiler control, valve and emergency shutdown systems before the terminal can restart safely. Two LNG cargoes are waiting offshore because they cannot be discharged.

On 27 July the minister for power, energy and mineral resources said the crisis could take another 10 to 15 days to ease, which points to a return to normal in early or mid August. The state minister has said Excelerate expects to restore 280 to 300 mmcfd at the start of the week beginning 3 August, with the full unit back the following week. The government has asked Malaysia for help covering the gap and is fast-tracking approval of an additional terminal at Moheshkhali.

The episode shows how narrow Bangladesh's gas base has become. Two floating units moored at a single location supply 30 to 40 percent of national gas, and there is no spare regasification capacity to absorb the loss of either one. Domestic production has fallen from about 2.7 billion cubic feet per day in 2017 to below 1.65 billion today, a drop of roughly 900 mmcf over six years, and no major field has been discovered in three decades. Fuel imports cost the country about 3.65 billion dollars over the past six months, adding pressure on foreign exchange reserves already strained by the global LNG price environment. Buyers sourcing garments, textiles, ceramics or fertiliser from Bangladesh should plan for delivery slippage through at least mid August, and should treat single-point regasification exposure as a standing structural risk rather than a one-off accident.