Cyclone Remal snuffs out Bangladesh LNG operations

Bangladesh’s key LNG infrastructure has come under nature’s wrath again as the country’s one of two floating LNG terminals was damaged during Cyclone Remal in late May and has remained out of operation since May 30th.

Like the aftermath of last year’s Cyclone Mocha, the South Asian country has been grappling with lower LNG imports and re-gasification affecting power generation, hampering industrial output and creating difficulties for all gas-guzzling consumers.

The country’s Summit LNG Terminal was damaged after being hit by a floating pontoon at Moheshkhali Island in the Bay of Bengal during Cyclone Remal that made landfall in Bangladesh and parts of neighbouring India late on May 26th.

“During Cyclone Remal, a broken stray steel structure weighing hundreds of tons banged the Summit LNG Terminal, causing significant damage,” an official statement from Summit Group narrated.

“The impact sheared the vessel’s outer hull, approximately one metre below the waterline, leading to water ingress into the ballast tanks,” it said.

On May 29th, authorities spotted the damage on the Summit floating, storage, regasification unit (FSRU) and reduced LNG regasification to zero by the morning of May 30th, after the cyclone had passed.

Bangladesh cancelled four spot LNG cargoes for June delivery windows as Summit’s FSRU remained shut during the entire month of June.

State-run Rupantarita Prakritik Gas Company (RPGCL) cancelled three spot LNG cargoes of Gunvor Singapore Pte. Ltd and one of QatarEnergy Trading LLC, a senior official of state-owned RPGCL said.

Gunvor was awarded these three tenders by Bangladesh’s cabinet committee on government purchase, the highest body to approve public purchase, to deliver spot LNG cargoes for June 7-9 and June 9-11 and June 28-29 delivery windows.

Bangladesh was supposed to purchase June 7-9 and June 9-11 delivery cargoes from Gunvor at $10.4622/MMBtu each, and the June 28-29 delivery cargo at $12.9697/MMBtu.

It cancelled the spot LNG cargo of QatarEnergy Trading LLC, which was scheduled for a June 19-21 delivery window.

QatarEnergy was supposed to deliver the spot LNG cargo at $10.30/MMBtu, said the RPGCL official.

The volume of LNG for each of the four spot LNG cargo was around 3.36 million MMBtu.

The RPGCL, a wholly-owned subsidiary of state-owned Petrobangla, looks after LNG trading in Bangladesh.

Petrobangla also requested its long term LNG suppliers – Qatargas and OQ Trading International — to reschedule several LNG delivery cargoes to cope with the crisis, a senior Petrobangla official said.

Summit LNG Terminal will not be available for LNG re-gasification until mid-July, said the official.

Summits’ FSRU left a mooring facility at Moheshkhali Islands in the Bay of Bengal in early June for carrying out repair works in Singapore dry dock.

Before leaving for repair, the FSRU regasified around 40,000-50,000 cubic metre of LNG, which were onboard when it faced the accident, the official added.

Summit LNG Terminal has sought to apply force majeure following the suspension of operations at its FSRU after its damage during Cyclone Remal and halt in LNG re-gasification subsequently.

Sources said, at least one LNG tanker vessel and two oil cargoes were taken off to deep sea near Kutubdia Island in the Bay of Bengal as a precautionary measure to avoid any damage from severe Cyclone Remal.

More than 33 million people in southern coastal areas in Bangladesh are without power as the cyclone damaged electric polls, wires and other infrastructures.

Several thousand homes made of clay, wood, plastic sheets, straw or tin were damaged and at least 10 people died due to Cyclone Remal, the State Minister for Disaster Management and Relief Md Mohibbur Rahman told news media after Cyclone Remal.

Some 107 upazilas and 914 unions and municipalities suffered losses where 35,483 houses were completely destroyed and 114,992 partially during the cyclone that affected some 3.75 million people in 19 districts across the country, he added.

Several dams in coastal areas were damaged and water submerged the low-lying areas, fallen trees and electric poles have worsened the sufferings of people due to Cyclone Remal with wind speed measuring up to 135 kmph.

Cyclone Remal led to tidal surges as high as 12 feet in southern coastal areas, coupled with heavy and gusty rainfalls.

State-run Bangladesh Power Development Board (BPDB) brought down power generation by one-third to 4,890 MW on May 27th, down by 64.37% of the previous day’s production of 13,726MW, according to official data of the National Load Dispatch Centre (NLDC) of state-run Power Grid Company of Bangladesh, or PGCB.

Bangladesh had slowed LNG regasification at its two FSRUs to around 320 MMcf/d just before the cyclone hit and gradually raised it back to around 1.0 Bcf/d by late May 29th. However, it fell back to 600 MMcf/d on May 30th after the damage to the Summit FSRU was identified, according to official data of Petrobangla.

The LNG vessel Gaslog Geneva, which suspended discharging its cargo halfway and was floated to deep sea as a precautionary measure during the cyclone, returned to the mooring facility on May 29th to unload LNG to Excelerate Energy’s FSRU Excellence.

Bangladesh’s overall natural output dropped by 16.13% to around 2.60 Bcf/d, including 600 MMcf/d of re-gasified LNG, from pre-cyclone Remal period of 3.10 Bcf/d when LNG re-gasification had reached all time high at 1.10 Bcf/d, Petrobangla sources said.

Officials said, unlike the previous year’s Cyclone Mocha, Bangladesh’s concerned authorities had instructed the FSRUs to keep tied with the mooring facility during Cyclone Remal as its hitting area was wider from the mooring facility.

During the previous Cyclone Mocha in May 2023, both the FSRUs had to cease operations, which had triggered an acute power and gas crisis, hampering businesses across the country.

The country’s main port city of Chattogram, which is dependent entirely on re-gasified LNG from FSRUs, was almost non-functional, with businesses halting operations completely.

During Cyclone Mocha, Petrobangla had to reschedule the delivery of at least five LNG cargoes when the country’s two floating LNG terminals were shut.

Bangladesh had deferred deliveries of LNG cargoes from both long-term suppliers along with spot supplier TotalEnergies during the Mocha mayhem.

The country’s two FSRUs, owned by Summit Group and U.S.-based Excelerate Energy, were both taken offline on May 12th, 2023 as a precautionary measure to avoid any damage from Cyclone Mocha, which hit Bangladesh and Myanmar on the afternoon of May 14th, 2023.

Summit LNG remained tied to its mooring system in the morning and restarted supply of re-gasified LNG on the afternoon of May 15th, 2023.

Excelerate Energy’s FSRU – Excellence — came online on May 20th, 2023 after an eight-day hiatus following its departure to deep sea, after de-plugging of mooring to prepare for Cyclone Mocha.

To tie up its FSRU to the mooring system and resume LNG re-gasification, Excelerate Energy had to fly in technical experts from Belgium.

Bangladesh had sought to apply the force majeure provision to avoid any demurrage or penalty resulting from the late unloading of LNG cargoes from suppliers during Cyclone Mocha.