Bangladesh has been a significant consumer of natural gas, which is central to its power generation and industrial sectors. Facing increased strain on domestic gas reserves, the government has actively explored cross-border partnerships to secure stable LNG supplies, a market that has seen heightened interest from Indian energy companies looking to broaden their regional footprint. Among these, H-Energy’s proposal included a pipeline project spanning from India’s West Bengal region to Bangladesh’s industrial hubs. While H-Energy holds a unique authorization from the Petroleum and Natural Gas Regulatory Board (PNGRB) to build the cross-border pipeline, the expected cost-benefit alignment has not assured Bangladeshi energy policymakers.
For Bangladesh, LNG is crucial, especially given the rapidly depleting natural gas reserves in its national grid. The country has leaned on suppliers in the Middle East and Southeast Asia, yet the volatility in global LNG prices has amplified pressure on the government to identify more sustainable options. Initially, H-Energy’s proposition of supplying re-gasified LNG seemed to be a fitting solution. However, factors such as geopolitical sensitivities, logistical concerns, and alignment with Bangladesh’s internal energy policies have contributed to a reassessment of this high-stakes deal.
Concerns over energy security and economic efficiency seem to be at the core of Bangladesh’s pivot. The project’s cross-border pipeline could introduce risks that Bangladesh’s government might prefer to avoid, particularly with an eye on maintaining a diverse supplier base. According to experts, while the India-Bangladesh LNG pipeline could facilitate significant bilateral energy cooperation, it also locks both countries into a long-term dependency that could complicate energy strategy adjustments. Additionally, the ongoing rise in energy transition initiatives globally has urged both India and Bangladesh to reassess their gas projects, with an increasing shift toward renewable energy sources and more flexible fuel options.
From H-Energy’s perspective, the pipeline and LNG supply project represents a broader strategic expansion aimed at establishing a South Asian energy corridor. The pipeline would have enabled H-Energy to secure a significant position in the Bangladesh LNG market, with hopes of providing a reliable alternative to Middle Eastern suppliers. H-Energy’s CEO Darshan Hiranandani had described the project as a “key milestone” in advancing energy security between India and Bangladesh, with hopes that both governments would push the project forward in a mutually beneficial arrangement. Despite these intentions, the decision of Bangladesh’s government to halt its involvement in the pipeline project underscores the complexities of energy diplomacy in South Asia.
For now, Bangladesh’s primary energy agency, Petrobangla, remains focused on ensuring that alternative sources and domestic infrastructure can adequately supply the country’s growing energy demand. Although H-Energy’s pipeline plan was endorsed as a potential game-changer in securing reliable gas for Bangladesh, the country has weighed the prospect against other LNG supply projects, which might offer more immediate returns or operational flexibility. Notably, reports from the region suggest that Petrobangla has been exploring other LNG procurement agreements that do not involve long-term pipeline dependencies, seeking instead to fortify its access to LNG through short-term and more diversified contracts.