Desk Report,
LNG import at risk, gas crisis may increase
Gas production in the country is declining. Therefore, reliance is increasing on imported liquefied natural gas (LNG). Currently, LNG meets more than 30 percent of the existing gas demand. LNG prices are increasing in the global market. There is instability in the Middle East due to the Iran-Israel conflict. This may disrupt LNG imports. If this happens, the gas crisis in the country will increase.
LNG import at risk, gas crisis may increase
Bangladesh Oil, Gas, Mineral Resources Corporation (Petrobangla) sources say that the daily gas demand is 3.8 billion cubic feet. When 3 billion cubic feet of supply is received, the situation is managed by rationing (reducing one sector and increasing another). Currently, the daily supply is 2.7 to 2.8 billion cubic feet. A plan has been made to supply 2.9 billion cubic feet. There is no possibility of increasing production in the country soon. If LNG decreases, the power, residential and industrial sectors will suffer.
Due to rough seas in adverse weather, LNG could not be taken from new ships. LNG supply has been decreasing since last Wednesday. On Wednesday and Thursday, consumers in Dhaka and Chittagong suffered from a severe gas crisis. The situation began to improve after the LNG supply increased on Thursday evening. Experts say that without LNG, gas supply close to demand cannot be maintained. Therefore, new sources of LNG should be found taking into account the conflict in the Middle East.
Petrobangla has started working on a plan to supply gas roughly in line with demand this year. Responsible officials of the company say that almost all of the LNG coming to the country comes from the Middle East. Most of it comes under long-term contracts. Therefore, it is not possible to create an alternative source if desired. In addition, even if the price increases slightly, LNG is being purchased from the open market as planned. If the conflict lasts long, the implementation of the plan will become difficult. If Iran closes the Strait of Hormuz, it will be difficult to maintain LNG supply. They are hoping that the conflict in the Middle East will end soon.
A Petrobangla report says that from June to December, 1.85 billion cubic feet of gas will be produced from domestic gas fields. But in June, it has come down to 1.82 billion cubic feet. Production from the country’s largest gas fields, Titas and Bibiana, is decreasing regularly. Production from several gas fields including Moulvibazar and Jalalabad has also fallen far short of capacity.
Petrobangla officials say that the country used to produce 2.7 billion cubic feet of gas per day. Due to the decrease in gas reserves, production cannot be maintained. It may decrease further in the coming days. The production of old wells is decreasing more than the amount of production being increased by new wells.
Mohammad Saiful Islam, Secretary of the Energy and Mineral Resources Department, told Prothom Alo that the withdrawal of import duty on LNG in the proposed budget could save Tk 7,000 crore. Therefore, plans were made to import additional LNG. The Iran-Israel conflict has created concerns, and imports may decrease slightly if prices increase. However, they are considering importing from Indonesia and Malaysia. Discussions are underway with Bahrain.
