The US energy giant Chevron has affirmed that it will move forward with the Jalalabad Compression Project in Sylhet, which has been on hold, after Petrobangla fully settled its due payments earlier this year.
Chevron Bangladesh President Eric M. Walker notified Petrobangla Director AKM Mizanur Rahman in a letter dated June 22 that the business will resume construction on the project, which had been put on hold for more than a year because of payment difficulties.
Up to 3,52,000 mmcf more gas will be produced from the Jalalabad field as a result of the eagerly anticipated project.

Chevron had previously committed $65 million to the project but withdrew its support as unpaid dues accumulated between 2023 and early 2025.

By August 2024, Petrobangla’s debts to Chevron had escalated to $237.55 million.

The state-owned energy corporation settled the full amount on 21 April 2025.

The day prior to clearing the debt, Petrobangla had officially requested Chevron to recommence work on the project.

In his response, Walker acknowledged the payment and expressed that Chevron was encouraged by the resolution of the prolonged financial dispute.

“Chevron Bangladesh has decided to move forward with the Jalalabad Compression Project in light of Petrobangla’s clearance of the outstanding arrears balance in April,” the letter stated.

While all overdue bills have now been settled, late payment penalties totaling $26 million remain outstanding.

These penalties could not be addressed earlier due to complications stemming from the global phase-out of the London Interbank Offered Rate (LIBOR), which was replaced by the Secured Overnight Financing Rate (SOFR) in 2024.

According to the original production sharing contract (PSC) with Chevron, such penalties were to be calculated based on LIBOR.

However, with LIBOR’s discontinuation and the PSC’s lack of mention of SOFR, Petrobangla was legally unable to process the payments.

“We amended the production sharing agreement on 22 June to facilitate the payment of due late payment fees,” stated Mizanur Rahman.

“Now that the amendment is in effect, we will settle all late payment penalties amounting to $26 million by July.”

Chevron has made it clear that the continuation of the Jalalabad project is contingent not only on the payment of the penalties but also on Petrobangla staying current with future invoices.

“Please be reminded that the continuation of the JBC is contingent upon Petrobangla remaining current with its monthly gas and condensate invoices and fully repaying all late payment interest amounts due by 30 September 2025,” Walker noted in the letter.

It is anticipated that the new compression project will boost production capacity and aid in resolving the nation’s persistent gas deficit.
The project was originally expected to be finished by 2025, but Petrobangla now projects that it would take about three years.
“We are pushing Chevron to finish the job as soon as feasible, given the nation’s gas predicament,” Mizanur Rahman stated.