Dhaka, April 5 -- American oil-major Chevron has deferred its $65-million Jalalabad compression project in northeastern Bangladesh following nonpayment of $220 million in overdue gas bills, market sources said.

Chevron Bangladesh wrote to state-run Petrobangla on Thursday about its decision not to execute its natural-gas-compression station near Jalalabad gas field in time.

This is for the first time that Chevron deferred any of its projects due to government default on payment of gas bills.

The US oil-and-gas explorer, the largest natural-gas producer in Bangladesh, approved a budget worth $65 million last year to build the compression station within 2025. It was doing the preliminary work to initiate the construction of the station t...