Bangladesh's crucial polls stand in the way of an overdue overhauling of US-based Excelerate Energy's floating storage and regasification unit (FSRU) as the government tries for a holdback again to ensure increased natural gas supply ahead of the general election.
The long-serving Awami League government bids for a fourth-consecutive term in the polls due in a couple of months, tentatively in early January 2024, amid a faceoff with the mainstream opposition led by BNP, a former ruling party.
The international energy major has already deferred four times its overhauling schedule for the FRRU until November 1 at the latest, a senior Petrobangla official told the FE Saturday.
"But Petrobangla now wants the overhauling be deferred again," said the official, without mentioning its prescribed date for deferment.
The government seeks to avert potential gas shortage ahead of the national elections, according to sources.
Country's overall natural gas supplies have already declined to around 2,670 million cubic feet per day (mmcfd), or 12.43 per cent, over the past several days, from around 3,049mmcfd with the LNG re-gasification plummeting to around 600mmcfd from around 950mmcfd.
All sorts of gas consumers-- industries, power plants, households and compressed natural gas (CNG) filling stations---are now feeling the pinches of gas shortages with the fall in overall output, said sources.
The LNG re-gasification will decline further once the Excelerate Energy's FSRU goes into overhauling, they feared.
The overhaul of the FSRU, named Excellence, will take around 45 days, leaving the country's remaining FSRU owned by Summit Group with additional work.
While re-gasification with a single unit reminds Bangladesh about severe gas and power crises in 2021, and the most recent during Cyclone Mocha in May this year; experts warn of potential technical glitches resulting from long-deferred scheduled overhauls.
"With a 3.75-million-tonne per-year (MTPA) capacity, Excellence began commercial operation on August 19, 2018, and never underwent servicing," said a senior Petrobangla official.
After the overhaul, he said, the FSRU's capacity would be enhanced by 20 per cent to 600 million cubic feet per day (mmcfd) as the cabinet committee on government purchase approved its expansion by 20 per cent last Wednesday.
With the overhaul, Bangladesh's overall LNG -regasification capacity, however, is set to increase to 1.10 billion cubic feet (Bcf) per day from the current capacity of 1.0 Bcf, utilising two operational FSRUs, including local Summit Group's 3.75-MTPA-capacity FSRU.
Both the FSRUs - located on Moheshkhali Island in the Bay of Bengal - went out of operation for a brief period during Cyclone Mocha in May under a precautionary measure to avoid any damage from the cyclone.
It took more than a week for the regasification to return to normal. Meantime, the country had to contend with energy shortages, coupled with rolling blackouts.
Petrobangla then was forced to ration gas supplies to industries and power plants, and the country had to rely more on oil-fired power plants to cope with the gas crisis resulting from the squeezed or non-operation of the FSRUs.
During the Excellence overhaul, the country will have to squeeze LNG import from the spot market to cope with the squeezed regasification capacity, said a senior official of Rupantarita Prakritik Gas Company Ltd (RPGCL), a wholly-owned subsidiary of Petrobangla, responsible for LNG trading in the country.
"Despite squeezing of spot LNG imports, Bangladesh will continue importing LNG from long-term suppliers during Excellence's overhaul period," the official added.
Bangladesh is set to receive a total of 14 LNG cargoes from its two existing LNG suppliers - Qatargas and OQ Trading - from October to December this year.
In October, Bangladesh will receive five LNG cargoes from long-term suppliers. Qatargas will supply three LNG cargoes and OQ Trading will provide two.
For both November and December, Bangladesh plans to import four LNG cargoes.
In November, Qatargas is scheduled to deliver three LNG cargoes, while OQ Trading will supply one, according to the 2023 annual delivery programme.
During December, Qatargas will be the sole supplier of all four LNG cargoes, the RPGCL official added.
Petrobangla will have to rely solely on Summit Group's FSRU for a month and a half during the overhaul period for Excellence. The servicing will leave the country's overall LNG regasification capacity limited to only 500mmcfd, he said.
After the initiation of the two FSRU operations, Bangladesh did, however, rely on one FSRU for LNG regasification in the past.
This occurred when Summit Group's FSRU was out of operation for three months from November 2021 due to the rupture of its mooring line from the mooring system in the Bay of Bengal.
According to official data from Petrobangla, Excelerate Energy's FSRU had to regasify 10 per cent more than its official capacity, reaching 550mmcfd, due to the short supply of natural gas. Summit's FSRU resumed LNG regasification on February 28, 2022, to resume normal operations.
To avoid potential energy disruptions ahead of the general election, Bangladesh consistently urged Excelerate Energy to postpone its overhaul schedule and was successful on four occasions: firstly, shifting it from April to June, then later from June to late September, and from late September to October 24 and then to November 1 in the latest.
But energy expert Prof M Tamim thinks the government is taking risks by delaying the scheduled overhaul of the FSRU to ensure supply of natural gas to industries, power plants and other gas-consuming consumers.
M Tamim, a professor at Bangladesh University of Engineering and Technology (BUET), said, "If the FSRU faces any sort of technical difficulty due to its continuous operation without overhaul, the government will have to pay the price."
The entire energy supply situation will also be at stake, added Mr Tamim, who was a special assistant of the former caretaker government.
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