Bangladesh's gas sector is on the verge of a critical crisis, with experts warning of a major upheaval by 2026.
Limited options exist to avert such a catastrophe, with the transportation of gas from Bhola via pipelines being one of the few feasible solutions.
Energy specialists have flagged increased LNG imports as a precarious option due to sky-high prices and limited import capacity.
The existing two Floating Storage Regasification Unit (FSRU) can import a maximum of 900 million cubic feet of LNG per day.
Setting up a new FSRU would take at least 18 months post-tendering, rendering increased imports unviable before 2026, even if price issues are disregarded.
Gas from the Sylhet Gas Field Company is available at a mere Tk1 per cubic metre, while importing the same quantity of LNG costs Tk71, making imports seventy times more expensive—an unfeasible burden for Bangladeshi consumers.
PetroBangla sources indicate that domestic gas, sourced from entities like the Sylhet Gas Field Company at Tk1 per cubic metre, Bangladesh Gas Field Company at Tk1.25, and BAPEX at Tk4, with a mix of gas purchased from multinational firms Chevron and Tullow, results in an average cost of Tk6.07 per cubic metre.
Current domestic sources yield approximately 2,000 million cubic feet daily, complemented by 900 million cubic feet from LNG imports, which raises the average gas price to Tk24.38 per cubic metre from Tk6.06.
In fiscal year 2023-24, PetroBangla recorded an average purchase price of Tk24.38 per cubic metre for imported gas, while the average sale price stood at Tk22.87, resulting in a loss of Tk1.56 per cubic metre.
Spot market LNG prices reached Tk71 in August 2024, compared to Tk65 in the previous year.
As domestic gas reserves dwindle, production continues to decline, with output from the Bibiyana field—once a major contributor, producing 1,350 million cubic feet—having dropped to 990 million cubic feet as of 5 November.
Bibiyana, which supplies 50% of domestic gas, may see its reserves depleted by 2026, potentially reducing domestic gas availability by 1,000 million cubic feet daily, thereby doubling the reliance and cost implications of LNG imports.
PetroBangla forecasts that the demand for gas will surpass 4,500 million cubic feet by the 2026-27 fiscal year, though some experts believe the true demand already exceeds this figure.
Dr Ijaz Hossain, an energy expert, advised that while limited LNG imports are necessary, domestic production must be bolstered.
He warned that uninterrupted energy supply could drive import costs to $24 billion, a severe strain on the economy, requiring at least ten exploration wells annually to maintain the current production of 2,000 million cubic feet.
Dr Mokbul Elahi Chowdhury, another energy expert, highlighted systemic issues stemming from prolonged neglect of domestic oil and gas exploration. He stressed that solely relying on LNG imports is unsustainable.
Measures such as rapid drilling of new wells, refurbishing existing ones, and curbing gas theft—estimated to result in a daily loss of 240 million cubic feet or 8% of supply—are crucial.
Former BAPEX MD Amjad Hossain recommended bringing gas from Bhola through pipelines and adopting tankering methods used by Indonesia to inject gas into existing infrastructure.
He suggested leveraging Sangu's facilities to feed gas into the grid and projected the cost of a Bhola-Khulna pipeline at approximately Tk7,000 crore. He highlighted Bhola’s proven reserves, suggesting substantial deposits.
The decline in domestic reserves, particularly at Bibiyana, has prompted repeated warnings from experts like CAB’s senior vice president Dr M Shamsul Alam, who stressed that without swift measures, including harnessing Bhola’s reserves, the crisis will worsen.
He emphasised reducing demand and promoting energy diversification as critical for long-term stability.
