Plan to bring change in gas deals to ensure smooth supply

The Energy Division is set to introduce a new clause deals to be signed for importing liquefied natural gas (LNG) to ensure the energy supplies security.

Taking experience from the existing deals, that did not say anything of gas supply during the "scheduled maintenance" period from the Floating Storage Regasification Unit (FSRU), which needs minimum 45 days, the Energy Division is set to do that.

"We experienced a bitter day on January 19, as there was no gas supply from the FSRUs, actually one FSRU was sent for maintenance work and another went out of order due to technical glitch, it halted entire gas supply in Chattagram areas," State Minister for Power, Energy and Mineral Resources Nasrul Hamid told the Daily Observer on Saturday.

Petrobangla signed two contacts with two companies, Excelerate Energy Bangladesh Ltd, a subsidiary of US-based Excelerate Energy, and Summit Oil and Shipping Co Ltd, a Dhaka-based public limited company of the Summit Group.

Unfortunately, there is no such a clause in deals with them for uninterrupted gas supply, the supply chain breakdown occurred that halted the gas supply to Chattagram areas on Friday and made public life miserable, especially in Chattagram areas.

Each LNG terminal has a capacity to supply 500 mmcfd gas to the national gas network from which a major portion is supplied to Chattagram.

"We have noticed it, we plan to incorporate some sort of provision into the clause so that we could be able to secure our supply into the national grid catering to the needs of house-hold and industrial consumers," the State Minister said adding that the country is now taking 20 per cent of gas supply from the FSRUs thus we should be re-think every item very seriously to stop public harassment.

Energy Division sources said Excelerate Energys FSRU started production after scheduled maintenance on Saturday, now it has been supplying 230 million cubic feet of gas per day (mmcfd) and hopefully the supply will reach 500 mmcfd soon.

The RPGCL, a subsidiary of state-owned Petrobangla, has been responsible to import LNG from abroad and receive re-gasification service from the existing two LNG terminals in Moheshkhali, one set up by Summit Group and another by US-based Excelerate Energy.

"The Excelerate Energys FSRU went on a 45-day maintenance programme suspending supply of gas to the national gas grid while the Summits FSRU experienced a technical fault halting gas supply to the national gas network, leading to a severe gas crisis in Chattagram and elsewhere.

The RPGCL official, however, informed that Summits FSRU also resumed production to a very low scale and it is providing a supply of 130 mmcfd against its capacity of 500 mmcfd.

Many areas in Dhaka, Narayanganj and Gazipur experienced extreme gas crises or low pressure problems, however, the entire country is facing gas crisis for last few months due to shortage of LNG supply," a senior official of Petrobangla said.

The country has a shortage of more than 1500 million cubic feet of gas per day (MMCFD) against the overall demand for 4000 MMCFD, Petrobangla said.

The official data of Petrobangla shows that the country produced 2405 MMCFD gas on 17, December 2023 including imported LNG (liquefied natural gas) against the demand of 4000 MMCFD.

It shows that the country is getting 361 MMCFD gas from imported LNG as imports witnessed a fall in recent months from a normal 800-900 MMCFD.

However, the gas crisis usually worsens during the winter in normal times, but this year it turned acute over a month before winter was to set in as initially government failed to import LNG due to dollar crisis and now there is supply chain disruption.

"Petrobangla had planned to import 48 LNG cargoes from January to December in 2023. But it could manage to import 22 LNG cargoes," State Minister for Power, Energy and Mineral Resources Nasrul Hamid told the Daily Observer.

"We think the situation will improve to some extent, but not fully", he said.

The current gas supply, as indicated by Petrobangla data, has reached its lowest point since April 2020, signaling a significant crisis affecting both the industrial sector and households, but we did not see any visible step by the government to extract domestic gas in the last 16 years….

it was the only solution of addressing gas crisis as we don have enough money to buy the dollar, or there is no alternate system of supply of FSRU.

However, we need to think it right now to ensure energy supply," Dr M Tamim, the former energy adviser to the caretaker government, said.