Russia offers LNG export to Bangladesh as solution to energy deficit

Russia has proposed exporting liquefied natural gas (LNG) to Bangladesh as the latter seeks to meet its long-term energy needs.

The proposal was made during the fourth session of the Russia-Bangladesh Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation, which began in virtual mode on Monday.

"We'll talk to the energy ministry on the Russian proposal. There are challenges as Russia is facing sanctions," said a senior official of the Economic Relations Division (ERD).

He said the meeting will discuss general issues before finalising matters in bilateral discussions.

Bangladesh currently faces a shortfall in its demand for 3,500 million cubic feet of gas per day (mmcfd), with 2,200 mmcfd coming from internal sources and another 600 mmcfd from LNG imports.

While Bangladesh imports LNG from Qatar and Oman, this marks the first time that Russia has offered to export LNG to the country at the government level.

"We have not yet received any written proposal from Russia," said Zanendra Nath Sarker, chairman of Petrobangla. "Once we receive it, we will consider all aspects and make a decision.

"Apart from Russia, we have also received proposals for short-term and long-term LNG purchases from various organisations and countries. A decision on which country to buy LNG from will be made soon."

Russia has also proposed exporting gas pipelines and other equipment to Bangladesh, as well as modernising the country's Ghorashal Unit-1 and Unit-2. 

Bangladesh's oldest power plants, which date back to the Pakistan period, are almost out of production, with a production capacity of 110MW. 

ERD officials noted that Russia has offered to sell the necessary products to modernise Bangladesh's power project directly rather than through tenders.

The two countries also discussed banking transactions, with Russia proposing to conduct trade and financial transactions in Bangladesh by using Moscow's currency, the rouble. Progress on the Rooppur Nuclear Power Project was also discussed.

Bangladesh is working on setting up 100 economic zones by 2030, and investments have been sought in these zones. Over the three-day period, the commission meeting will also discuss skill development, agriculture, increasing bilateral trade, fisheries, railways, ICT and greater connectivity, especially people-to-people contacts.

Officials from various Bangladeshi ministries and divisions, including the Finance Division, Commerce Ministry, Power Division, Energy and Mineral Resources Division, Petrobangla, Civil Aviation and Tourism ministry, ICT Division, the Bangladesh Bank, Agriculture Ministry and Fisheries and Livestock Resources ministry, are participating in the commission meeting. 

The commission was established in 2017 to oversee all economic collaborations. A yearly commission meeting has been scheduled. The first meeting was held in Moscow in 2018, followed by the second meeting in Dhaka in 2019. However, due to Covid-19 restrictions, the third meeting was conducted via video conferencing in 2021.