Bangladesh eyes long-term US LPG deals

Bangladesh has intensified its efforts to secure a long-term supply of liquefied petroleum gas (LPG) from the United States while also seeking access to financing from the US International Development Finance Corporation (DFC), signalling a broader strategy to strengthen the country’s energy security through closer cooperation with Washington.

The initiative comes as Bangladesh looks to diversify its fuel import sources, reduce supply risks and build a more resilient energy system to meet rising domestic demand.

Alongside long-term LPG imports, the discussions also pave the way for wider cooperation in liquefied natural gas (LNG), energy infrastructure and strategic investment.

The discussions took place during a high-level meeting in Washington in June between Bangladesh’s Finance Minister Amir Khosru Mahmud Chowdhury at the embassy and Laura Anderson, Senior Economic Adviser at the US Department of State, according to officials familiar with the talks.

As part of its strategy to strengthen energy security and diversify fuel imports, Bangladesh requested support from the US government to encourage American energy companies to participate in its proposed long-term LPG supply programme.

Officials said, "The Energy and Mineral Resources Division (EMRD) has already invited 10 US companies to submit expressions of interest to supply LPG to Bangladesh.”

During the meeting, the Bangladeshi side asked US to engage with those companies and encourage them to consider the proposal.

The move reflects Bangladesh’s intention to establish dependable long-term supply arrangements instead of relying primarily on short-term purchases from the international spot market, where prices can fluctuate sharply during periods of geopolitical tension or supply disruption.

Long-term contracts with reliable suppliers could help improve supply stability, strengthen energy planning and reduce exposure to volatile global markets.

Although the current discussions focus on LPG, officials believe stronger energy cooperation with the United States could also support Bangladesh’s wider LNG strategy.

The country already imports LNG to supplement declining domestic natural gas production, while demand for cleaner fuels continues to grow across industry, power generation and households. Expanding partnerships with major energy exporters such as the United States could therefore provide greater flexibility in securing future fuel supplies.

In response, Anderson said, "The US Department of State, together with the Department of Energy and the Department of Commerce, was coordinating the matter.”

She also said, "The relevant agencies intended to engage with prospective suppliers and requested the Bangladesh Embassy to provide the list of invited companies so discussions could begin.”

Officials from Bangladesh’s Ministry of Commerce and the EMRD viewed the development as a positive sign of growing US support for expanding bilateral energy cooperation and increasing the involvement of American private-sector firms in the country’s energy sector.

The meeting also focused on Bangladesh’s efforts to qualify for financing from the US International Development Finance Corporation, which provides loans, guarantees and political risk insurance for infrastructure and private-sector projects in developing economies.

According to officials, Anderson expressed confidence that Bangladesh could become eligible for DFC support in the future.

She advised Dhaka to continue raising the issue during bilateral engagements while preparing a portfolio of priority projects that could be presented to potential American investors once eligibility is secured.

For Bangladesh, access to DFC financing could become an important part of executing a broader energy partnership with the United States. The financing could help support infrastructure required for fuel imports, storage, transmission and industrial development while encouraging greater participation by American investors in strategic projects.

A senior official at the Bangladesh Investment Development Authority (BIDA), speaking on condition of anonymity, said, "Access to DFC financing would strengthen Bangladesh’s ability to attract long-term foreign investment for major infrastructure, energy and industrial projects.”

Both sides also discussed expanding business-to-business engagement between the two countries. Referring to a Bangladeshi business delegation that travelled to the United States in May with support from the US Embassy in Dhaka, officials agreed that future trade missions should focus on specific industries to deliver stronger commercial outcomes.

They also agreed to identify priority sectors for future Bangladeshi business delegations visiting the United States.

The talks covered future cooperation on two major energy infrastructure projects in Bangladesh. According to officials, the US side indicated that both the American government and US companies were interested in participating in the bidding processes for the planned Floating Storage and Regasification Unit (FSRU) and the second refinery project of Eastern Refinery Limited (ERL-2).

Industry experts said, "These projects would play an important role in strengthening Bangladesh’s fuel import capacity.”

A new FSRU would improve LNG receiving and regasification capability, while the ERL-2 refinery would expand the country’s refining capacity and improve the overall resilience of the energy sector. Participation by experienced international companies could also help bring advanced technology, operational expertise and investment.

Bangladesh’s Finance Minister said, "The matter would be referred to the Energy and Mineral Resources Division for further consideration.”

Following the meeting, the Bangladesh mission recommended several follow-up measures. These include sharing the list of potential US LPG suppliers with relevant American agencies, continuing diplomatic efforts to secure DFC eligibility, preparing investment-ready projects for future financing, identifying priority sectors for business cooperation and keeping the US government informed about upcoming bidding opportunities for the FSRU and ERL-2 projects.

Analysts said, "The effectiveness of any long-term LPG or future LNG partnership will depend on several factors. These include timely government-to-government coordination, competitive commercial terms, transparent procurement, strong participation from private-sector suppliers and the development of supporting infrastructure to handle growing fuel imports.”

Officials believe the latest discussions reflect a broader effort by Bangladesh and the US to strengthen cooperation on energy security, strategic investment and commercial partnerships as Bangladesh seeks reliable supplies of cleaner fuels and financing for large-scale infrastructure.

They also described the initiative as Bangladesh’s first major government-led effort to establish long-term LPG supply arrangements with the United States.

If translated into commercial agreements and backed by investment in supporting infrastructure, the initiative could mark an important step in Bangladesh’s long-term strategy to diversify energy sources, improve fuel security and deepen its strategic energy partnership with the United States.