Gas cut to power plants to worsen loadshedding 

The government has decided to reduce the allocation of gas to power plants in order to increase gas supply to the industrial sector. Previously, power plants were supplied approximately 950 million cubic feet of gas per day, but the plan is to reduce this to 750 million cubic feet that would save approximately 200 million cubic feet of gas, to be redirected to industries. 

Power Division has directed the Petrobangla to divert the gas from power to industry sector, however, it would increase loadshedding across the country. Due to receiving less gas, power plants are not being able to operate at full capacity.

Along with this pressure, Nepal has suspended the 40 MW electricity supply to the national grid as its infrastructure has damaged, Power Division said. Adani's power plant has also reduced production since August 7 due to disruptions in coal supply, providing around 900 megawatts during the day and a maximum of 1,200 megawatts from evening until midnight.

*    Nepal suspends 40 MW electricity supply to BD
*    Gas, coal and fuel shortages hit 62 power plants
*    Over 300 garment factories shut-down while 660 textile mills suffer from  acute gas crisis

In addition to gas, the shortages of oil and coal are also adding pressure on power generation. While there have been efforts to increase production from oil-fired plants to manage the deficit, the limited supply of fuel oil means not all plants can be operated. On Thursday, 24 power plants faced shortages in fuel oil supply.

The combined capacity of eight coal-based plants is approximately 7,000 megawatts, but on Thursday, production was less than 5,000 megawatts. One unit of the Payra plant is closed due to a technical fault, one unit of the Matarbari plant is under maintenance, and two units of the Barapukuria plant are shut down due to faults. 

To manage the crisis in the industrial sector, gas supply to power plants has been reduced. This, combined with shortages of fuel oil and coal, has also created pressure on electricity generation. As a result, load-shedding has been on the rise over the past few days.

The situation improves somewhat when rainfall reduces electricity demand, but load-shedding increases again as temperatures rise. Until now, the pressure of load-shedding was mainly on customers outside Dhaka. However, following government directives, load-shedding has also started in Dhaka since the night of August 12. While there was a plan to implement load-shedding in any area of the capital once a day for a maximum of one hour, in reality, many areas are experiencing power outages multiple times.

On Thursday, due to shortages of gas, coal, and fuel oil, production was disrupted at 62 power plants. As a result, the trend of load-shedding has continued to rise. On August 24, the maximum shortfall during the daytime was 1,193 megawatts. By 3 PM on August 25, it had increased to 2,259 megawatts. At midnight on August 26, the deficit was 2,828 megawatts. By 3 PM on Thursday, it had risen further to 3,664 megawatts. The deficit remained above 3,000 megawatts at night as well. At 1 AM, demand was 17,171 megawatts against a supply of 13,927 megawatts, resulting in a deficit of 3,244 megawatts. At 3 AM, the deficit was 3,090 megawatts. On Friday at 4 AM, it was 2,915 megawatts, and at 6 AM, load-shedding was 2,636 megawatts. By 3 PM, load-shedding had decreased to 1,483 megawatts.

At 6 PM on August 28, the total gas supply further decreased to 2,339 million cubic feet. Of this, domestic sources supplied 1,616 million cubic feet, and LNG supplied 723 million cubic feet. This means that compared to August 26, the total supply dropped by 71 million cubic feet in two days. LNG supply decreased by 67 million cubic feet during this period. According to government figures, the daily gas demand in the country is 3,800 million cubic feet, but according to stakeholders, the actual demand ranges from 5,000 to 5,500 million cubic feet.

According to Petrobangla data, at 2 PM on August 25, the total gas supply in the country was 2,381 million cubic feet, with domestic gas at 1,616 million and LNG at 765 million cubic feet. The next day, at 12 PM on August 26, the supply slightly increased to a total of 2,410 million cubic feet, with LNG rising to 790 million cubic feet. Since then, supply has been decreasing again. At 4 PM on August 27, total gas supply dropped to 2,354 million cubic feet, and LNG was at 736 million cubic feet.

Amidst uncertainty regarding LNG cargoes, gas supply in the country has started to decline again. In the last five days, the supply from imported LNG has decreased by approximately 70 million cubic feet, exacerbating the already existing gas crisis. Production in industries is being disrupted, and queues of vehicles at CNG stations are lengthening.

For instance, at Mosharraf Composite Textiles in Gazipur, normal production of 170 tons of yarn per day has dropped by about 30% due to the gas crisis, causing the factory an estimated loss of approximately 5 crore taka in one month. A textile mill in Narsingdi remained shut for 22 consecutive days due to a lack of gas. A dyeing factory in Narayanganj has had no production since August 18 due to gas unavailability.

According to the Bangladesh Textile Mills Association, 660 textile mills have been suffering from an acute gas crisis since the third week of July. The Bangladesh Knitwear Manufacturers and Exporters Association reports that production has completely stopped in at least 300 garment factories in various areas, including Narayanganj. Industrial owners fear that prolonged low gas pressure will harm both production and exports, and failure to deliver goods on time could risk losing foreign buyers.

The industrial sector has been hit hardest by the gas shortage. Since the third week of July, gas pressure in the industrial areas of Gazipur, Narayanganj and Narsingdi has decreased significantly. In some places, gas pressure drops to near zero during the daytime, and in others, factories cannot be operated for more than a few hours.

Amidst the declining gas supply, uncertainty has arisen regarding securing the necessary LNG cargoes in the future. Due to high prices and lukewarm responses from suppliers, it is not possible to procure cargoes according to demand. Furthermore, there is doubt about the supply of two scheduled cargoes for the coming days. Thus, maintaining the current supply itself has become a major challenge. If these cargoes do not arrive on time, the gas supply could decrease further, intensifying the crisis.

LNG is supplied to the national grid from the two floating terminals of Summit and Excelerate at Maheshkhali. The supply suffered a major blow when the Excelerate terminal was shut down following a fire incident on July 21. After it was repaired, the terminal remained closed for several days due to a cargo shortage, and supply resumed on August 22 when a cargo finally arrived.

The delayed arrival of several cargoes procured through Direct Purchase Method (DPM) in August created significant pressure on gas supply. There was a schedule for two cargoes to arrive yesterday (Friday) and this coming Monday, but they are not coming. Although steps were taken to procure cargoes through tenders, imports could not be increased as needed due to high prices and low response from suppliers. As a result, stakeholders believe gas supply will decrease further.