Gas supply to increase as Adani unit resumes, but load-shedding continues

Gas supply may increase somewhat from Monday. Meanwhile, one unit of the Adani power plant, which had been shut down due to a technical fault, resumed operations yesterday. Despite this, it will take some time for load-shedding to ease to a tolerable level, as three of the country’s major coal-fired power plants are generating only about half of their capacity.

The country has been facing a gas crisis for more than a month and a half. Reduced power generation due to the gas shortage has led to increased load-shedding. Industries are unable to operate at full capacity, while consumers are also facing greater difficulties in cooking and transportation.

Petrobangla oversees the import of liquefied natural gas (LNG), while its subsidiary Rupantarita Prakritik Gas Company Limited (RPGCL) handles the imports. Three officials involved in LNG supply told Prothom Alo that supply could not be increased because fewer LNG cargoes were being imported. Cargo arrivals have now become more regular, allowing supply to be increased.

According to Petrobangla sources, daily gas demand stands at 3.8 billion cubic feet (bcf), while the situation is usually managed by supplying 2.65–2.7 bcf. Yesterday, however, supply stood at 2.37 bcf, including 750 million cubic feet from LNG.

LNG supply may be increased to 930 million cubic feet from Monday. If that happens, total daily gas supply will rise to 2.55 bcf. Petrobangla expects this to ease the gas shortage faced by industries.

Petrobangla Chairman Md Abdul Mannan told Prothom Alo that the supply of LNG cargoes in the global market is limited. Despite this, Bangladesh is importing LNG according to demand. Supply is being increased from Monday and the gas supply situation is expected to improve soon.

Domestic gas production has been declining for nine years. LNG imports began in 2018 to make up for the shortfall. There are two floating storage and regasification units (FSRUs) at Maheshkhali in Cox’s Bazar for supplying imported LNG—one operated by US company Excelerate Energy and the other by local company Summit.

Excelerate Energy’s terminal was shut down after a fire on 21 July. Following 25 days of severe gas shortages, the terminal became fully ready to resume supply on 15 August. However, supply could not be increased because new LNG cargoes were arriving in smaller numbers.

Bangladesh usually imports an average of 10 LNG cargoes a month, although the number varies depending on demand. While 21 cargoes arrived in July-August last year, only 15 have arrived during the same period this year.

Four cargoes purchased through the direct procurement method (DPM) were scheduled to arrive in August, but none did. There is little likelihood of their arrival this month either. LNG is also not arriving from Qatar under long-term contracts. As a result, Bangladesh has been forced to buy LNG from the spot market at higher prices.

Petrobangla and RPGCL sources said a plan was made to import 10 LNG cargoes in September. Although tenders were invited several times, all 10 cargoes could not be secured. Prices have also risen significantly.

Nine cargoes have been confirmed for this month. Of these, two are from Gunvor in the United States under long-term contracts, two from Aramco under short-term contracts and five have been purchased from the spot market.

RPGCL sources said two Aramco cargoes and one from BP have already supplied LNG this month. A cargo from South Korean company POSCO was scheduled to arrive yesterday and is expected to reach Bangladesh on Monday morning.

Another cargo from Gunvor is scheduled to arrive on 16 September, followed by one each from Aramco on 18 September, TotalEnergies on 23 September, Aramco on 25 September and Gunvor on 28 September. This will create scope for increasing LNG-based gas supply.

According to Energy Division sources, the US-Iran conflict in the Middle East, uncertainty over Qatar’s supply and increased European demand ahead of winter have pushed up LNG prices. LNG prices in the international market have nearly doubled over the past six months.

In January, LNG prices in Asia’s spot market stood at USD 10–11 per million British thermal units (MMBtu). By late April, prices had risen to USD 14–15. They climbed to around USD 22 in the final week of July and exceeded USD 28 in September.

Meanwhile, LNG cargo purchases for October have begun. Six cargoes have already been confirmed for October, while tenders have been invited to purchase another five.

The Adani power plant had been operating at reduced capacity for about a month due to a coal shortage. One of its units shut down around midnight last Wednesday because of a technical fault, further reducing generation and worsening load-shedding across the country.

The second unit of the Adani plant resumed supplying electricity at noon yesterday. By 6:00pm, the plant’s supply had increased to more than 1,450 megawatts.

The plant had earlier reduced generation from 7 August after coal supplies were disrupted by a storm. Once coal supplies increased, generation exceeded 1,400MW on Wednesday night. But after one unit shut down that day, generation fell below 750MW.

The coal-fired Adani power plant in Jharkhand, India, has a capacity of 1,600MW. It has previously supplied more than 1,500MW depending on demand.

Before the Adani unit resumed operations, one unit of the Rampal power plant in Bagerhat shut down around 11:30am yesterday due to a technical fault. As a result, the plant’s generation fell by half.

The Rampal plant, built as a joint venture between India and Bangladesh, is coal-fired. Its generation had earlier fallen due to a coal shortage, but it now has sufficient coal reserves. Until yesterday morning, it had been generating more than 1,100MW. After one unit shut down, generation fell to 657MW yesterday.

Anwarul Azim, general manager of human resources and public relations at the power plant, said it could take four days for the unit to resume generation.

There are two coal-fired power plants in Patuakhali, built as joint ventures between China and Bangladesh. Each has a capacity of 1,320MW.

One unit of the Payra power plant is currently shut down due to a technical fault, leaving the plant generating 570MW. It has sufficient coal reserves.

At another power plant in the same district, generation has fallen to 400–800MW due to a coal shortage. Together, the two plants are generating more than 1,000MW less than their potential output.

Sources at the Bangladesh Power Development Board (PDB) and Power Grid Company said coal-fired plants have the highest power-generation capacity. However, a series of problems have affected coal-fired plants over the past month, making it difficult to meet electricity demand.

Load-shedding exceeded 3,000MW at midnight on Saturday. During the daytime yesterday, it also exceeded 2,500MW.

PDB Member (Generation) Md Zahurul Islam told Prothom Alo that technical faults are occurring at coal-fired plants because they have been operating continuously, and maintenance work is underway.

Fuel oil imports are also being increased, and supplies have already begun arriving. Up to 3,800MW of electricity has been generated from fuel oil. Fuel oil supplies are expected to increase after 20 September, allowing power generation to be raised further.