Bangladesh is facing a growing subsidy burden from its reliance on imported LNG, with the government having to provide over Tk 60 in subsidy for every cubic metre of gas when imported LNG costs US$20 per million British thermal units (MMBtu), according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

The report says high and volatile Liquified Natural Gas ( LNG) prices, supply disruptions and rising project costs have weakened the financial viability of gas-fired power projects in Bangladesh and other emerging Asian economies.

Titled LNG-to-Power in Emerging Asia: A Five-Year Review of Project Outcomes, the report released on Thursday reviewed 92 proposed LNG-fired power projects worth an estimated US$109.2 billion and 44 LNG import terminals valued at US$21 billion in Bangladesh, the Philippines, Vietnam and Thailand.

Of these, 49 proposed power plants and 22 LNG regasification terminals, with a combined investment value of US$67.8 billion, were cancelled or made no notable progress between 2021 and 2026.

Only 11 percent of the proposed power generation capacity and 15 percent of the planned LNG import terminal capacity became operational across the four countries during the period.

The report also found that completed LNG-fired power plants took more than seven years on average to begin commercial operation, compared with the three to four years generally projected by developers.

Shafiqul Alam, IEEFA’s lead energy analyst for Bangladesh, said LNG price trends over the past four to five years had raised serious concerns about affordability and supply reliability for Bangladesh as a price-sensitive importer.

He said Bangladesh had to provide more than Tk 60 in subsidy per cubic metre of gas when imported LNG cost US$20 per MMBtu.

Supply disruptions had forced the country to purchase LNG at even higher prices at different times this year, putting further pressure on public finances.

According to the report, Bangladesh has commissioned three LNG-fired power plants since 2021.

However, high LNG and electricity costs have increased the government’s subsidy requirements and deepened its reliance on external financing to protect foreign exchange reserves.

Despite substantial spending, the country continues to face gas shortages because of unreliable LNG supplies.

Alam said Bangladesh should make better use of its untapped domestic gas resources, improve energy efficiency and expand renewable energy on a large scale rather than relying increasingly on imported LNG.

He also called for greater attention to demand-side electrification. Industries, for example, could replace gas-fired boilers with highly efficient heat pumps to reduce gas consumption and improve energy efficiency.

Rising costs threaten investments

The report identified LNG price volatility, higher capital costs, longer delivery times for gas turbines and depreciation of Asian currencies against the US dollar as major factors undermining the financial viability of LNG-to-power projects.

Christopher Doleman, co-author of the report and IEEFA Asia’s LNG and gas specialist, said the combined effect of these risks could increase the lifetime levelised cost of electricity from LNG-fired power plants by up to 130 percent compared with assumptions made in 2021.

Asian spot LNG prices reached US$27.50 per MMBtu in September 2026, nearly three times their pre-conflict levels.

The report also pointed to a global shortage of gas turbines, which has pushed up construction costs and delayed new projects. Delivery times for heavy-duty gas turbines now extend to six years or more.

Meanwhile, falling costs and shorter deployment times for solar and wind power, alongside growing battery storage capacity, are reducing the need for LNG-fired plants to provide baseload and peak electricity.

The report found that the Philippines had faced difficulties securing bankable power purchase agreements, while renewable energy expansion and limited LNG demand outside the power sector had weakened the business case for new projects.

Vietnam has ambitious LNG-to-power targets, but only one project has reached commercial operation over the past five years. Uncertainty over power purchase agreements, rising fuel prices and electricity tariff adjustments have discouraged investment.

Thailand has made greater progress in developing gas-fired power projects, although a significant share of the capacity of existing gas-fired plants and LNG terminals remains underutilised.

Sam Reynolds, co-author of the report and IEEFA Asia’s LNG and gas research lead, said volatility in fuel, equipment and currency markets had increased execution risks and made project financing more difficult across emerging Asia.

He said the poor performance of LNG-to-power projects since 2021 suggested that expectations of rapid LNG demand growth in the region might be disconnected from actual project outcomes.