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Bangladesh in pursuit of its developmental aspirations as a growing economy finds itself in need of a whopping $13 billion in primary fuel annually to sustain its power plants, fuel-based industrial activities, and meet the energy demands of households.
This substantial requirement, according to the experts, stands as a significant challenge.
During the past decade, the government in a bid to implement the development agenda increased gas-based power plants from 3,500 MW to 26,500 MW, established export-oriented industries, and set up 100 economic zones that required significant amounts of gas and electricity.
Unfortunately, after a prolonged lockdown caused by Covid-19, the world suddenly finds itself in a war-prone situation, making the global economy vulnerable. The price of primary fuel has increased more than 100 times.
However, the government has decided to cut LNG (liquefied natural gas) from the spot market as the price has risen from $8 to $65, impacting the supply of gas to power plants and industries.
Normally, productive industries face gas crises throughout the year. Unfortunately, this time the gas crisis has reached its highest point in 50 years. Even residential customers in some areas are facing gas shortages. Moreover, LNG supply to the grid is declining at regular intervals for repair and maintenance.
Additionally, the import of LNG will face additional crises due to a scarcity of dollars and the high price of LNG in the international market, whereas Bangladesh needs 6,000 mmcfd by 2026.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid told The Daily Messenger, “We are facing an adverse situation. The world economy has become unstable, and we have to adapt to the changed circumstances. Measures have already been taken to tackle the situation.”
He added, “We have initiated drilling in 46 wells across the country that will supply 500 mmcfd by 2025 to the national grid.”
Nurul Amin, Secretary for the Energy Division, told The Daily Messenger, “Though our stance remains the same regarding coal, we are conducting a study on the extraction of local coal. We are very aware of the gas crisis in the country.” “We have taken measures to arrange the imported LNG and extract local gas,” he added. Besides, the government is under pressure due to huge outstanding bills, he informed.
According to the import plan, Bangladesh will import 2,500 mmcfd RLNG from India by 2027. The government hopes that Chevron will extract 1.6 TCF of gas from the Bibiyana gas field, serving the country for 1.5 years.
According to the estimation of investment, Bangladesh needs $400 per capita investment, while the World Economic Forum forecasts that Bangladesh can invest $250 per capita.
Consequently, the volume of production in the industry will decrease, and production costs will increase. However, gas prices have increased by 180 percent.
According to Petrobangla, gas supply has decreased by 34.21 percent. The country has a demand for 3,800 mmcfd of gas per day. In contrast, Petrobangla supplied 2,500 mmcfd.
Chairman of Petrobangla Zanendra Nath Sarker told The Daily Messenger, “In the current economic situation, LNG prices have risen. On the other hand, we have signed several contracts with Oman and Qatar that will start supplying from 2026.”
Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Muhammad Hatem told The Daily Messenger, “Garments are the biggest foreign currency earner for the country. If production declines, exports will also decline. Winter is the vital season for the RMG. So, we need an adequate amount of gas and electricity, but a shortage of gas will hamper production and expenditure.”
A Petrobangla official said that the daily gas supply last month was more than 2,800 million cubic feet. In the previous month, about 3,000 million cubic feet of gas was supplied to the national grid.
However, LNG terminals have a capacity of 1,000 million cubic feet. Normally, 800 to 1,000 million cubic feet of gas was supplied to the grid from the two terminals. Due to the dollar crisis, the spot market has been supplying 600 million cubic feet of gas for several days. Due to maintenance, sometimes daily LNG supplies drop below 500 million cubic feet.
The import of LNG is not increasing. Even the supply of domestic gas to meet the shortfall cannot be increased soon.
The government estimated a demand for the summer at 17,500 MW. But generation will depend on the availability of the required fuel. Power generation will suffer if the required coal, gas, and liquid fuel cannot be supplied as demanded. The present outstanding payments of the power and energy sector are about US$5 billion. Only about 60-65 percent of the total gas demand can be met.
Replying to a question, Nasrul Hamid told that an initiative has been taken to make a major portion of outstanding payments to the power sector soon. The outstanding payments of the energy sector will be made in phases soon.
He agreed that arranging money to ensure a smooth supply of primary fuel is a major challenge. “The total money required will depend on the price of fuel in the global market,” he said.
Messenger/Fameema
