Bangladesh has slashed natural gas production by around 36 per cent to 1,600 million cubic feet a day as the nationwide shutdown to combat the coronavirus has dented domestic demand.
While demand slipped by around one-third to 2,132 mmcf per day, it has kept import of liquefied natural gas, or LNG, almost unchanged.
Of the domestic natural gas production, Petrobangla has reduced the daily gas output from the fields operated by international oil companies by 41 per cent to around 941 mmcf.
Gas fields operated by local companies also cut the daily output by more than a quarter to 656 mmcf, according to state-run Petrobangla data as on April 11.
LNG re-gasification, meanwhile, has remained unchanged to around 550 mmcfd, which is almost equal to pre-shutdown period.
"We are trying to maintain or increase LNG imports keeping domestic production lower to reap the benefits of current lower LNG prices in the international market," RPGCL managing director Md Kamruzzaman told the FE on Sunday.
State-run Rupantarita Prakritik Gas Company Ltd, or RPGCL, a subsidiary of Petrobangla, oversees LNG imports in Bangladesh.
With the brent crude hovering at around $31 per barrel in the international market, Bangladesh's LNG import cost dropped below $4.5 per million British thermal unit, or mmBtu, which is almost half the price when the country started import of LNG in April 2018, said Mr Kamruzzaman.
"Since we have an obligation to import a certain quantity of LNG from the long-term suppliers, we have decided not to reduce LNG imports, despite the fall in overall domestic demand," he said.
Natural gas production from the IOCs was also reduced so that overall natural gas output cost of Petrobangla can be lowered.
US's Chevron and Singapore's KrisEnergy are currently producing gas from four producing fields, of which Chevron's share is 915 mmcfd, while Singapore's KrisEnergy produces around 26 mmcfd of gas, according to Petrobangla.
Petrobangla currently purchases gas from IOCs at around $3 per mmBtu.
Almost all types of gas-based industries and factories are now shuttered under the lockdown aimed at slowing the spread of deadly virus.
Only the gas-guzzling power plants are operational with limited output due to lower electricity demand across the country, which fell by around 20 per cent to around 8,000 megawatts, according to the state-run Bangladesh Power Development Board.
To meet the domestic gas demand, Bangladesh currently has been importing LNG under long-term deals from Qatar's RasGas, as well as Oman's Oman Trading International.
Two floating regasification units, owned by US-based Excelerate Energy and local Summit Group, are operational in Bangladesh.
Both the units have the capacity to re-gasify around 500 mmcfd of LNG each.
Separately, Bangladesh eyes starting importing LNG from the spot market by July in an effort take the advantage of low prices and meet the country's growing demand.
RPGCL has already inked master sale and purchase agreement with 14 global suppliers to import LNG from the spot market.
The agency will procure spot LNG based on market prices, terminal availability, re-gasification capacity and downstream demand.
Spot LNG prices have hit the historic lows this year owing to lower demand caused by milder than usual winter coupled with the Covid-19 outbreak and increased supply from the US and Australia.
