A scheduled liquefied natural gas (LNG) shipment failure of Oman Trading International (OTI) aggravated the winter-time crisis of natural gas supply across the country over the past couple of weeks.
As a consequence, furnace oil import also increased by around 33 per cent in January to around 200,000 tonnes. It happened due to higher-than-expected consumption by the power plants concerned after squeezing of electricity generation in the gas-fired power plants.
Gas-guzzling industries, power plants, compressed natural gas (CNG) filling stations and household consumers are still suffering the pinch coupled with the decade-long winter-time gas supply crisis, it has been alleged.
LNG re-gasification slipped to almost one third, as low as 200 million cubic feet per day (mmcfd), last week from the previous week's around 600 mmcfd.
Besides, overall natural gas supply dropped to around 2,700 mmcfd, according to statistics of the state-run Petrobangla.
The OTI's LNG cargo, which was scheduled to supply around 138,000 cubic metres on January 18, 2021, shifted its delivery to January 22, said a senior Petrobangla official.
When asked about the delay in supplying LNG, the Petrobangla official could not elaborate further.
Industry sources, however, predicted that the Omani supplier might have sold the scheduled cargo to spot market, which offered at least three-fold higher price than the oil-linked term deal prices of Petrobangla.
The spot LNG price in Asia was hovering around the record high of US$ 24 per Mcf (1,000 cubic feet) during mid-January. Oil-linked term prices were hovering around $8.0 per Mcf during the period, they said.
Bangladesh currently imports LNG from Qatargas and OTI under oil-linked term deals.
Talking to the FE, the Petrobangla official, however, expected that LNG re-gasification situation will return to normalcy soon.
LNG regasification increased to 400 mmcfd on Wednesday after the delayed delivery of LNG cargo from OTI, he added, quoting Petrobangla data.
Regarding the winter-time gas crisis he said the country's old gas pipelines can flow less gas due to cooler temperature in winter, resulting in fall in pressure that leads to the crisis.
Lower-than-expected LNG import in January forced the state-run Bangladesh Power Development Board (BPDB) to rely more on the oil-fired power plants instead of the gas-fired ones to generate electricity, said a senior official.
Bangladesh's heavy sulphur fuel oil (HSFO) import in December was around 150,000 tonnes, the lowest since May, as the onset of winter reduced air-conditioning demand, said Imran Karim, president of Bangladesh Independent Power Producers' Association (BIPPA).
January is considered the coldest month in Bangladesh, with temperatures ranging from about five degrees Celsius to about 22 degrees Celsius, reducing the need for use of air-conditioners. Petrobangla could not purchase LNG from spot market over the past several months, as it either did not receive any bid from LNG suppliers or their quoted prices were higher than expected.
The agency could so far buy only one LNG cargo - in September 2020.
The government, however, decided to continue floating tenders to import LNG from spot market despite non-submission of 'suitable' offers from bidders over the past several months and higher quoted prices.
Bangladesh initiated importing LNG from spot market two years after the country's first LNG cargo import in August 2018.
It now buys LNG from Qatargas under a 15-year contract to import around 2.5 million tonnes of the fuel every year.
The agreed price is 12.65 per cent of the three-month average price of Brent crude oil plus 0.50 US cents per Mcf.
Under a 10-year term deal, Bangladesh imports around 1.5 million tonnes of LNG from OTI every year at 11.9 per cent of the three-month average price of Brent crude oil plus 0.40 cents per Mcf.
The country has two operational floating, storage, and regasification units (FSRUs) to regasify imported LNG. Each of these FSRUs has the capacity to regasify around 500 mmcfd.
US-based Excelerate Energy started commercially supplying regasified LNG from its FSRU since August 2018, and Summit from its FSRU in April 2019.
