News Desk :
“Bangladesh will have to spend $20bn annually by 2030 if the current trend continues”
Bangladesh’s overdependence on the import of Liquefied Natural Gas (LNG) instead of exploring its own resources is going to hurt the country’s energy security in near future and its prospect to become a gas economy, said energy experts.
They fear that Bangladesh may even need to import 90 percent of primary energy by 2030 spending $20 billion annually if the current trend of LNG import continues.
They blamed the lack of effective steps to go for hydrocarbon exploration in the country and the pressure by vested quarters to import LNG by the private sector in their ill-efforts to make Bangladesh a fully-import dependent energy user.
According to the annual report published by the International Group of LNG Importers (GIIGNL), Bangladesh ranked 15th among the nations in the world that increased their LNG imports most in 2020.
Expressing grave concern over the country’s energy situation, energy expert and former professor of Chemical Engineering Department of Bangladesh University of Engineering and Technology (Buet) Dr Ijaz Hossain said Bangladesh is moving towards a dangerous situation as Petrobangla has failed to conduct necessary exploration in hydrocarbon sector.
“Currently, we’re importing 20-25 percent of gas as LNG from abroad. If there’s no discovery within the next 10 years, we’ve to import more than 90 percent gas from foreign sources,” he said.
“The government has to ensure at least 15 percent drilling — 5 percent by Petrobangla and 10 percent by foreign companies-to avert the future crisis.
Dr also Ijaz said there might be the influence of vested interest groups for increasing LNG import, but the government has to take the right decision to increase exploration works.
Official data of the state-owned Petrobangla reveals, currently 20 percent of the total gas supply has to be met by import while the country is consuming gas of about 2,970 million cubic feet per day (MMCFD) against a demand for 4610 MMCFD.
As per the country’s Gas Master Plan 2017, the demand will increase to 5257 MMCFD in 2022-23, 6228 MMCFD in 2024-25 to meet the needs of different sectors, including power and industry, in line with average 7 percent economic growth.
According to a forecast by Petrobangla, the country’s gas production from the local fields will be depleting and imports will continue to rise to meet the growing demand in power, industry and other sectors.
Petrobangla’s Annual Report 2020 says the country’s total initial recoverable proven plus probable gas reserve of 27 fields has been estimated to be at 28.29 trillion cubic feet (TCF). Up to December, 2020, as much as 18.24 TCF gas was produced, leaving only 10.05 TCF of recoverable gas in 2P category. Currently, 20 gas fields are in production with 105 wells on-stream.
The official data from the state-owned Rupantarita Prakritik Gas Company Limited (RPGCL), a subsidiary of Petrobangla, shows that the government had to import 4.16 million metric tons of LNG in fiscal year 2019-20 and 4.46 million MT in 2020-21.
Bangladesh’s overall natural gas output is currently hovering over around 2974 million cubic feet per day (mmcfd), of which 581 mmcfd is regasified LNG and the remaining around 2400 mmcfd of gas output comes from local gas fields.
Petrobangla has been purchasing LNG at around 11.9 per cent of the three-month average of Brent crude oil prices plus $0.40 cents per mmBtu and the payments are to be made within 25 days of delivery. Petrobangla started the regular LNG import on September 9, 2018.
Contracted, long-term LNG suppliers have slashed the sales commitment to Bangladesh for next year to cash in on ‘volatile’ spot-market prices amid post-corona business rebound. The short-supply commitment on LNG might lead to the country’s overall natural gas-supply shortfall next year if local gas output does not increase.
Besides, the government has not yet adopted any plan to import LNG from the spot market next year although it imported a total of 16 LNG cargoes from the spot market in 2021. They prefer trading in LNG on the volatile spot market where prices surged around fivefold of the rates under term deals.
Earlier, on September 22, a meeting of the Cabinet Committee on Public Procurement approved a proposal to import 3,380,000 MMBTU LNG. At that time, the price per MMBTU was US$29.79. The decision was taken not to buy the product from the spot market till December due to rising LNG prices.
But the energy department backtracked on the decision, citing a gas shortage.
Experts disagree with the decision to buy LNG from the spot market, as they said Bangladesh does not have the situation to buy LNG from the spot market.
If Bangladesh wants to buy LNG, it has to buy it with a long-term plan. Instead of looking at the international market, Bangladesh has to focus on achieving its own production capacity.
The country needs 75-80 crore cubic feet of LNG per day for uninterrupted power supply. But in contrast, the amount of LNG supply in the country is about 400 million cubic feet. The deficit is more than 35 crore cubic feet. The amount of this deficit is constantly increasing.
Energy expert Prof Mohammad Tamim said, “LNG is usually bought from the spot, when there’s an additional need after meeting the basic demand. But there’s a deficit in our basic needs. So, I think, we should get out of the spot. When we’ll be able to produce enough gas or stay in the long-term contract. Then if that happens, we might buy from the spot. But now we should move away from the spot.”
