Bangladesh will have to depend more on volatile spot market this year to import costly liquefied natural gas (LNG) to feed mounting demands from industries, power plants and other gas-guzzling consumers as domestic natural gas output is on the wane, market insiders said.
The country, for the first time, has planned to source a major portion of LNG from spot market compared to long-term LNG suppliers this year resulting in an increasing pressure on foreign currency reserves, they said, adding that the country's spot LNG imports are set to double this year compared to 2024.
A senior Petrobangla official said state-run Petrobangla has planned to import a total of 115 LNG cargoes -- 59 from spot market and 56 from long-term suppliers, which marks a 33.72 per cent increase compared to that of the previous year.
Last year, the country imported a total of 86 LNG cargoes -- 56 from long-term suppliers and 30 from spot market, the official added.
Bangladesh imported half of the last year's total spot LNG cargoes or 15 in the past three months - October, November and December. The increase followed the resumption of operations of Summit LNG Terminal after a seven-month shutdown caused by overhauling, technical glitches and damage from cyclone Remal, he said.
Summit's floating storage and re-gasification unit (FSRU) was offline from January to mid-April due to maintenance and technical issues. After resuming operations, Summit's FSRU re-gasified LNG for around one and a half months until late May before it was struck by a floating pontoon during the cyclone. The FSRU resumed operations in mid-September after recovering from the damage, the official elaborated.
Despite the cessation of operations during the initial weeks in 2024, US's Excelerate Energy's FSRU - Excellence - resumed operations following the overhauling and 20 per cent expanded re-gasification capacity to 4.50 million tonne per year from mid-January, he added.
Bangladesh imported only 15 LNG cargoes in between June to September in 2024 while it had imported 23 spot LNG cargoes in 2023.
The country has been importing the same number of LNG cargoes -56 - from its two existing long-term LNG suppliers-Qatargas and OQ Trading International-over the past three years when the LNG demand across the world grew after initiation of Russia-Ukraine war, said a senior official of state-owned Rupantarita Prakritik Gas Company Ltd (RPGCL).
The RPGCL, a wholly owned subsidiary of Petrobangla, deals with LNG imports from global suppliers.
Both suppliers, however, had supplied a total of 64 LNG cargoes before the Russia-Ukraine war in 2021.
The volume of LNG supply from the two long-term suppliers is around the minimum volume they are bound to deliver under their sales and purchase agreements, or SPAs, with Petrobangla, said the RPGCL official.
Of the total long-term LNG cargoes for 2025 -- Qatargas will supply 40 LNG cargoes and OQ Trading will supply 16 LNG cargoes. The regular size of an LNG cargo is 138,000 cubic metres.
Considering the current market price, Bangladesh has to pay US$45-50 million to import one spot LNG cargo from international market.
According to the Petrobangla estimation, natural gas demand from power plants will be 1,980 million cubic feet per day (mmcfd) in 2025, 1,000 mmcfd for industries, 350 mmcfd for fertiliser factories while there will also be a hike in demand from other sectors.
Like in the previous several years, the country will have to ration gas supplies to consumers to cope with the short supply of natural gas.
The country's natural gas output from local gas fields has been on the decrease and over the past one year the output declined by around 117 mmcfd to around 1,933 mmcfd on December 31, 2024 from 2,050 mmcfd as of December 31, 2023.
Country's overall natural gas output is currently hovering around 2,737 mmcfd, of which around 802 mmcfd is re-gasified LNG, according to official Petrobangla's data as of January 1, 2025.
Azizjst@yahoo.com