New LNG cargo arrives, boosting gas supply; but crisis far from over

A new vessel carrying liquefied natural gas (LNG) has arrived in the Bay of Bengal and connected to the Excelerate Energy terminal, with gas supply to the national pipeline resuming on Saturday afternoon after a three-day suspension.

The resumption has begun to increase overall gas supply, although it may take several more days for the crisis to ease fully.

Petrobangla, which oversees LNG imports with approval from the Energy and Mineral Resources Division, has assigned its subsidiary Rupantarita Prakritik Gas Company Ltd (RPGCL) to handle the imports.

Three officials involved in LNG supply told Prothom Alo that Excelerate began supplying 100 million cubic feet of gas from 2pm. The volume may increase somewhat after 9pm.

After a severe gas crisis lasting 25 days, supply improved on 15 August when Summit’s terminal resumed full operations and Excelerate’s terminal partially restarted. However, with no new LNG cargo arriving, supply from Excelerate gradually declined and stopped completely on Wednesday afternoon.

Following the arrival of the new vessel on Saturday, the terminal resumed supply using its available reserves.

Domestic gas production has been declining for the past nine years, prompting Bangladesh to begin importing LNG in 2018 to meet the shortfall. The country has two floating LNG terminals at Maheshkhali, one operated by US company Excelerate Energy and the other by local company Summit.

Excelerate’s terminal was shut down following a fire on 21 July. Although it was ready to resume full LNG supply on 15 August, the absence of a new cargo meant it could provide only a partial supply from its existing reserves.

Since Excelerate's shutdown, Summit had been supplying gas above its capacity. At one point, however, Summit also had to suspend supply because of a lack of LNG.

According to Petrobangla and RPGCL sources, Bangladesh's daily gas demand stands at around 3.8 billion cubic feet. The situation is usually managed with a maximum supply of about 2.7 billion cubic feet, including 1.05 billion cubic feet from LNG imports and the remainder from domestic gas fields.

For the past month, however, LNG supply has averaged around half of its capacity.

LNG supply stood at 580 million cubic feet at noon on Saturday and rose to 680 million cubic feet in the afternoon, taking total gas supply to 2.3 billion cubic feet.

If LNG supply reaches 750 million cubic feet on Saturday night, total gas supply is expected to rise to 2.37 billion cubic feet. Supply may remain at a similar level over the next few days, meaning the gas crisis is unlikely to be resolved immediately.

Sources involved in LNG imports said the Energy Division had issued purchase orders for several LNG cargoes through direct procurement outside the regular process, seeking lower prices. Four cargoes were scheduled to arrive in August, but none arrived.

The failure of those directly procured cargoes to arrive created an LNG shortage, leaving the terminals unable to supply gas despite being operational.

After issuing tenders in three rounds since 18 December, authorities secured two LNG cargoes for this month. One arrived on Saturday afternoon and was scheduled to begin unloading at the terminal later that night.

The other LNG cargo is expected to arrive between 26 and 27 August.