The government is moving ahead with a 295-kilometer pipeline (Moheshkhali/Matarbari-Bakhrabad) to increase supply of liquefied natural gas (LNG) in the national grid. This project at an estimated cost of $1.4 billion is still with the Planning Commission. The government is not yet sure about the sources of the money. Even if the construction of the pipeline begins this year, it will be complete in 2029 at the earliest. Without ensuring money or pipeline, Petrobangla has aready signed three long-term LNG supply deals. People concerned fear that Petrobangla may incur a huge loss in case of failure to coordinate between LNG import and the pipeline construction.

The country is due to receive an additional 5.5 million tons of LNG by 2026 under the new and to be signed agreements. This will cost Petrobangla few billion dollars every year. The deals are being signed at a time when the organization cannot manage the necessary money for LNG import under the existing agreements. Petrobanagla is having to resort to Gas Development Fund (GDF) and foreign loan for money. Energy experts find managing money and construction of planned infrastructure as the main challenge of Petrobangla to import LNG.         

However, Petrobangla claims that it will be possible to supply through the existing pipeline if the LNG comes under the new deals. “The current capacity of the pipeline is up to 1,700 million cubic feet. At present, two floating terminals are supplying 750-800 million cubic feet. Initiative has been taken to set up a LNG land based terminal. Feasibility study of the project is already done. Once completed, LNG will be supplied in full swing,” said Petrobangla Director (Operations and Mines) Kamruzzaman Khan talking to Bonik Barta.   

According to sources at the Energy Division, in order to increase LNG import, the government, in June last year, approved the construction of a third terminal with a daily supply capacity of 600 million cubic feet. Summit Group, a local enterprise, is to construct the terminal. The project is awaiting final approval from the government.     

“We are waiting for the signing of Terminal Using Agreement,” Summit Group Director Faisal Khan told Bonik Barta.

Besides, Accelerate Energy of the United States is to construct a floating terminal at Payra of Patuakhali to supply 500 million cubic feet LNG per day. But, the company has not yet been able to sign an agreement with Petrobangla, which has already signed two government to government deals and one with the private sector for long-term LNG supply. And, another new agreement with the private sector is on the way to be signed. Under this deal, the LNG import may begin in 2026. According to the import estimate, the national grid will then be able to supply 2,000 million cubic feet of gas.      

There is no pipeline in the country that can supply LNG at a large scale. The planned pipeline will not be operational until at least 2029. The project is still waiting for the approval. Gas Transmission Company Limited (GTCL) could not tell for sure where the money will come from if the project is approved.    

“There is an initiate to undertake a large project for LNG supply. Preliminary development project proposal has already been sent to the Planning Commission for approval in principle. The loan proposals will be sent to development partners after the approval,” a senior GTCL official told Bonik Barta.    

It has been learnt from the GTCL sources that project proposal for 295-kilometer Moheshkhali/Matarbari-Bakhrabad pipeline has been prepared. The pipeline project has been proposed mainly in coordination with the land-based terminal in Moheshkhali. With regard to the construction of this terminal, only the issue related to land has so far been resolved.        

Requesting anonymity, two officials from Petrobangla and Rupantarita Prakritik Gas Company Limited (RPGCL) told Bonik Barta that the existing pipeline can at best supply 1,500 million cubic feet gas every day. It is no way possible to ensure proper supply with the existing infrastructure.

To overcome the supply crisis, the government has already signed three long-term deals to import LNG. According to the agreement signed with OQ Trading of Oman in June last year, Bangladesh will import from 0.25 million to highest 1.5 million tons of gas every year. Under the 10-year agreement, the import will begin in 2026.      

Petrobangla signed another deal with Qatar Energy Trading LLC in June, last year. Under the 15-year agreement, Petrobangla will buy 1.5 million tons LNG per year.

The government entity inked a deal with US private company Accelerate Energy in November last year. The company is to supply 1 million tons LNG every year. The supply will begin in January, 2026.  

Besides, under an agreement with the Summit Group, Petrobangla is to receive 1.5 million tons LNG. The supply under this deal will begin in October, 2026. A preliminary agreement in this regard has already been signed, Summit confirmed to international news agency Reuters.    

Currently, Petrobangla is importing LNG from Qatar and Oman under two long-term agreements under which up to 4 million tons can be brought every year. Another 5.5 million will come if the new four deals are signed. However, after the expiry of the existing deal with Oman, the country will import 8.5 million tons per year.

The country now has two floating terminals for regasification of imported LNG. There should be a supply of 1,000 million cubic feet every day from these terminals owned by Summit Group and Accelerate Energy. The capacity now stands at 1,100 million cubic feet daily after Accelerate Energy enhanced its daily capacity by 100 million cubic feet.

It has been learnt that the daily capacity of these two floating terminals is 1,200 million cubic feet although due to low pressure of gas this capacity was never exhausted.         

Individuals involved in energy sector feel that the new government plans regarding LNG import will face a considerable challenge. They say the money is not yet ensured to import gas. And, there is a significant risk of a huge loss in the coming days for concluding the agreements without necessary infrastructure development.

“Alongside LNG import deals, the supply capability is equally important, especially the readiness of the terminals at the time of import. The coordination has always been an issue in the power and energy sectors. As a result, financial loss is incurred,” Energy specialist and a professor of Bangladesh University of Engineering and Technology (BUET), Dr M Tamim, told Bonik Barta    

Many projects in the power and energy sectors fail to reap financial benefits due to lack of coordination. Three large power stations at Meghna Ghat have been left unused for about a year due to the absence of gas pipeline. Besides, despite constructing long transfusion line, Khulna is deprived of gas and Rangpur, Bogra and Saidpur are not getting large supply.

Bangladesh started importing LNG in April, 2018. The import process is being completed by the RPGCL, a subsidiary of Petrobangla. According to the hydrocarbon unit of the Energy Division, the country imported little over 1,002 billion cubic feet LNG from August, 2018 till June last year. A staggering $10 billion was spent to import this amount of gas. Having spent such a huge amount, Petrobangla, once a profitable entity, has now come close to bankruptcy. Due to crises over foreign currency and money, the organization is being forced to borrow from different entities and Gas Development Fund. Even, it owed money to the LNG-supplying companies from time to time.