Petrobangla to get Tk 20b to import LNG

The finance ministry has given its consent to provide Tk 20 billion to the Petrobangla from Gas Development Fund (GDF) to import liquefied natural gas (LNG), reports UNB.

An official order, a copy of it obtained by UNB, reveals that as per proposal of the energy division, the finance ministry agreed to provide the fund as loan to the state-owned Petrobangla.

The approval from the finance ministry came against the backdrop of the severe fund crisis the Petrobangla has been facing following the excessive price hike of gas in the international market as a fall out of the Russia-Ukraine war.

The price of LNG has crossed US$39 per MMBtu from below US$10 after the Russia-Ukraine war began on 24 February 2022.

About the finance ministry's approval, Consumers Association of Bangladesh (CAB) vice president M Shamsul Alam said this is an indication that the government is in a serious crisis in dealing with the energy sector.

Recently the energy division announced its decision not to import any LNG from the international spot market because of the price hike.

As a result, it has to go for reducing power generation from gas-fired plants that forced the power entities to resort to planned load shedding.

However, it continued importing LNG from Oman and Qatar under long term contracts where price is fixed, but varies to some extent on different conditions.

Now, it's not clear whether Petrobangla will use the new fund to resume import of LNG from the spot market or utilise it to import gas from long-term suppliers.

The Gas Development Fund (GDF) was created by the order of the Bangladesh Energy Regulatory Commission (BERC) a few years back to allow the Pertrobangla to receive additional money with gas bills from the consumers to use the fund for gas exploration in the country.