Bangladesh gas crisis worsens as FSRUs cease operations

Bangladesh is currently undergoing a severe gas crisis as the country’s two floating, storage, and re-gasification units (FSRUs) ceased operations alternately for overhauling for the first time since initiation of their operations around five years back.

One of the two FSRUs  – the U.S. Excelerate Energy-owned FSRU – reinitiated LNG re-gasification from mid-January after a two-and-a-half-month hiatus due to its maintenance and capacity expansion works.

The South Asian country’s second FSRU, operated by Summit LNG Terminal Co. Ltd — a subsidiary of the local Summit Group — is currently under maintenance. It ceased LNG re-gasification in mid-January and is expected to re-initiate re-gasification from mid-March.

Although the government scheduled the overhauling of both the FSRUs during the winter, when the country’s energy demand is usually low, the dependency on FSRUs has exposed the dark side of Bangladesh’s energy security over the past several months.

A technical fault while plugging and de-plugging of the FSRUs in the mooring facility at Moheshkhali Island in the Bay of Bengal aggravated the country’s gas crisis further.

The country’s main port city Chattogram was entirely out of gas supply on Jan. 19th when Excelerate Energy’s FSRU was working to resume LNG re-gasification after returning from overhauling, while Summit’s FSRU was preparing to leave the mooring facility for overhauling.

It caused a shutdown of all the gas-fired power plants, fertiliser factories and industries in the port city, as Chattogram was entirely dependant on re-gasified LNG.

It took several days to re-open the closed power plants including the Raozan 420 MW power plant, the Shikalbaha 440 MW plant, the Barabkunda 22 MW plant and the Shikalbaha 40 MW plant, the Chittagong Urea Fertiliser Factory and the Karnaphuli Fertiliser Company, Aminur Rahman, the general manager of Karnaphuli Gas Distribution Company (KGDCL), told Gas Outlook.

The KGDCL is responsible for gas supply in the port city.

On that day LNG re-gasification from Summit’s FSRU was waning as it was gradually reducing its stocked LNG before leaving Moheshkhali mooring facility for overhauling.

The remaining FSRU owned by Excelerate Energy could not start its operations properly as planned, which resulted in a crisis of back-up pressure at Summit’s FSRU and led to an abrupt gas crisis in the port city, Rahman said.

The natural gas crisis irked all sorts of consumers including industry owners, power plants, compressed natural gas (CNG) filling stations, and household consumers resulting in a cut in industrial output and causing untold suffering to the public, industry insiders said.

The gas crisis has now become so acute that the Bangladesh Textile Mills Association (BTMA), which once advocated for hiking the natural gas tariff to get an adequate supply of gas, is now seeking to revert the gas tariff to its pre-hike level.

The government had increased the gas tariff by up to 178.88% per cent from February 2023 with the assurance of an uninterrupted gas supply, the BTMA President Mohammad Ali Khokon said in a press conference on Jan. 29th.

However the gas supply situation did not improve, but rather deteriorated further this year, since the increase in the gas prices, Khokon stressed.

The gas crisis has now turned from bad to worse, says Mohammad Hatem, the Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Industrial output dropped to 50-70%, he added, referring to the domino effect of the fuel crunch on the export industry.

Over the past several months, the situation was that, if natural gas is found in some areas in the morning, they are not getting it in the evening. Similarly, if the industries get gas in the evening, they are not getting it in the morning, Hatem lamented.

The CNG filling stations are also getting much-lower-than-expected gas pressure in most areas, and in some areas, there is no gas, Farhan Noor, the General Secretary of Bangladesh CNG Filling Station and Conversion Workshop Owners Association said.

The power plants are also not getting enough gas to generate electricity.

Some three dozen gas-fired power plants are now shut, as state-run Petrobangla could supply around 743 million cubic feet per day (mmcfd) of natural gas to the plants against their demand for 2,240 mmcfd according to Petrobangla data as of Feb. 4th.

Electricity generation in Bangladesh tumbled to nearly a third of the overall capacity due to scarcity of natural gas amid sagging winter demand.

According to the state-run Bangladesh Power Development Board (BPDB), countrywide electricity generation during peak daytime hours on Feb. 4 plunged to 9,520 MW, against the country’s overall installed power generation capacity of 26,504 MW.

Generation during evening peak hours on Feb. 4th increased a little, to 10,550 MW.

A senior BPDB official said the natural gas crisis is limiting power generation to the tune of around 4,025 MW as state-run Petrobangla was not supplying adequate gas for power generation.

Bangladesh’s Ministry of Power, Energy and Mineral Resources (MPEMR) has warned that the power crisis might continue due to the gas crisis.

The MPEMR through an official Facebook post a couple of weeks back said that production from gas-fired power plants was low due to the LNG supply crunch.

A power outage in some areas might occur for a brief period as a consequence, it said.

The ministry apologised for the inconvenience, saying that it was working relentlessly to resolve the crisis.

After the overhauling and capacity expansion at Excelerate Energy’s FSRUs, current LNG regasification capacity increased to around 170,000 cubic meters with send-out capacity of 600 mmcfd from its previous capacity of 138,000 cubic metres and send-out capacity of 500mmcfd, Petrobangla Chairman Zanendra Nath Sarker said.

Petrobangla intends to re-gasify up to 8.33% more LNG or up to 650mmcfd until resumption of operations at Summit’s FSRU in mid-March, he said.

To appease vexed consumers, the State Minister for the Ministry of Power, Energy and Mineral Resources, Nasrul Hamid, however, assured that the ongoing gas crisis will ease by March when both the FSRUs will be operational.

Uninterrupted gas supply to consumers could be possible by 2026 when several new long-term LNG suppliers will initiate supplying the fuel under new contracts, Hamid said during a recent press conference.

Bangladesh’s natural gas output is currently hovering around 2,702 mmcfd of which 644 mmcfd is regasified imported LNG, according to Petrobangla statistics as of Feb. 4th.

Gas demand is, however, above 4,000 mmcfd, according to Petrobangla.