Gas crisis: Energy sector suffers from import reliance

More than 65 per cent of the energy consumed in the country has to be imported. Imports also account for 9 per cent of electricity generation capacity.

For nearly three weeks, the supply of Liquefied Natural Gas (LNG) has been disrupted, leading to an intensified gas shortage. Power supply from imported electricity has reduced as well, resulting in increased power cuts (load-shedding).

Experts say the country's power and energy sector is suffering precisely due to this reliance on imports.

Sources at the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) stated that two weeks after LNG supply dropped by half owing to a fire accident, it registered a slight increase last Thursday. However, adverse weather at sea reduced the supply once again from Monday evening, cutting daily gas supply by over 250 million cubic feet.

If marine conditions improve, supply may increase slightly from today, Wednesday, sources added.

Aninda Islam, Minister of State for Power, Energy and Mineral Resources, told Prothom Alo on Tuesday morning that an LNG cargo ship is anchored nearby. Due to adverse weather, the LNG could not be transferred to the terminal. The Energy Division is working with all stakeholders to rapidly boost gas supply.

There are two floating terminals in Moheshkhali, Cox’s Bazar, for supplying imported LNG. Among them, the terminal owned by US company Excelerate Energy has a capacity of 600 million cubic feet, while local firm Summit’s terminal has a capacity of 500 million cubic feet.

Following a fire accident on 21 July, Excelerate’s terminal was shut down. This led to a drop in gas supply and worsened the crisis. Production across various sectors—ranging from household cooking stoves to industrial factories and power generation—was disrupted. Long queues of vehicles were also seen at filling stations waiting for CNG.

Stakeholders point out that due to import reliance, any global crisis repeatedly disrupts the country’s energy supply. When the Russia-Ukraine war broke out in 2022, the gas crisis worsened nationwide. As energy supplies dropped, power cuts ensued.

On 28 February, US-Israel strikes took place in Iran, and Iran retaliated by targeting US bases across various Middle Eastern countries. Consequently, the government struggled to maintain the supply of fuel oil domestically.

This time, the gas crisis escalated after a terminal was shut down due to fire. Earlier in 2024, a terminal remained non-operational for nearly three and a half months following damage caused by a cyclone. Whenever adverse weather conditions arise at sea, apprehensions over LNG supply re-emerge. Although a new vessel carrying LNG arrived on Monday, it could not offload at the terminal owing to rough seas.

Petrobangla sources mentioned that Excelerate's terminal has two boilers, each with a capacity of 300 million cubic feet. One of them was damaged in the fire. The undamaged boiler resumed supplying gas last Thursday, and work is currently underway to commission the damaged boiler.

According to the Petrobangla source, once the damaged boiler is ready for operational testing, the running boiler will need to be shut down. During that period, gas supply from Excelerate's terminal will come to a complete halt. Gas supply can resume after being suspended for at least 12 hours, after which supply will gradually normalise. Therefore, Petrobangla intends to carry out this work on a holiday when gas demand is lower.

Two officials from the Energy Division and Petrobangla stated that Excelerate Energy has been asked to submit an action plan regarding the inspection, testing, and supply restoration. Further decisions will be taken after consulting with the Energy Division. Gas supply from Excelerate will not increase any further this week.

The national demand for gas stands at 3.8 billion cubic feet per day. Under normal circumstances, the situation is managed by supplying up to 2.7 billion cubic feet, of which 1.05 billion cubic feet comes from LNG.

Following the shutdown of Excelerate’s terminal, Summit’s terminal supplied LNG beyond its capacity for four consecutive days—supplying up to nearly 570 million cubic feet per day during that period. Since then, it has been supplying 500 million cubic feet daily. However, failing to offload LNG from the new ship, Summit reduced supply after 7:00 pm on Monday.

Sources in gas distribution state utilities said Summit was supplying 200 million cubic feet on Tuesday evening, while Excelerate Energy was supplying 300 million cubic feet. Domestic gas fields contributed around 1.63 billion cubic feet.

In total, gas supply stood at around 2.13 billion cubic feet—the lowest level in the past three weeks. Gas distribution companies are struggling to meet demand. If LNG cannot be offloaded from the new ship today, Wednesday, gas supply will fall even further.

Iqbal Hassan Mahmood, Minister for Power, Energy and Mineral Resources, stated that the government is working towards a long-term solution to the energy crisis.

Speaking on Tuesday at a seminar titled "Energy Sector Crisis: Prospects and Ways Forward", he remarked that the previous Awami League government did not ensure sustainable development. Consequently, the closure of a single LNG terminal has triggered a countrywide gas outcry.

He added that the incumbent government inherited this crisis in the power and energy sector and is actively managing it.

Speaking at the same seminar on Tuesday afternoon, Minister of State for Power, Energy and Mineral Resources Aninda Islam noted a significant gap between electricity demand and supply, as well as in the energy sector.

He affirmed that the government is striving to alleviate public hardship stemming from the energy crisis.

Power cuts did not ease yesterday as electricity generation could not be increased. Data from the Power Development Board (PDB) and Power Grid Bangladesh PLC (PGCB) indicate that highest daily power load-shedding has exceeded 3,000 megawatts over the past few days.

According to the PDB, on Sunday, peak load-shedding reached 3,671 megawatts. It rose to 3,757 megawatts on Monday, before dropping slightly following heavy evening rains. However, it began rising again from Tuesday afternoon, reaching a peak of 3,465 megawatts at 3:00 pm.

PDB officials mentioned that electricity demand rises as temperatures climb, but generation cannot keep pace with demand. Gas shortages have cut power production by nearly 1,500 megawatts. Two major coal-fired power plants are operating below capacity.

The officials further said that caution was being exercised regarding increasing generation from oil-fired power plants due to high costs, as running oil-based plants extensively would increase PDB's financial losses. Petrobangla has been requested to increase gas supply, while coal-fired plants have been directed to maximise production.

Power Division sources stated that coal imports were affected due to outstanding bills owed to power plants, leading to coal shortages at two plants. Adani’s power plant in Jharkhand, India, reduced production on 7 August. Coal supply was disrupted by storms and heavy rain, preventing the plant from maintaining generation levels, though production is expected to increase today.

Experts observe that the previous Awami League government did not prioritise domestic gas exploration and production, leading to a continuous decline in local gas output. LNG imports began in 2018, while electricity imports started in 2013.

According to them, there is no immediate fix for the current energy crisis; imports remain necessary in the short term, but domestic energy sources must be expanded alongside. The current government has placed emphasis on domestic gas exploration, inviting tenders for offshore oil and gas exploration, while initiatives have also been undertaken to boost renewable energy generation.

M. Shamsul Alam, Energy Adviser to the Consumers Association of Bangladesh (CAB), told Prothom Alo that the nation became import-dependent far too early. Had that not happened, such a severe crisis might have been avoided today.

However, financial strain, he said, could have been mitigated by curbing corruption and plunder. Moreover, proper import management could have averted the crisis.

He emphasised the need for cost-effective energy usage aligned with national revenue, warning that generating power from fuel oil instead of importing coal will inevitably drive costs up.