Bangladesh started importing 'expensive' LNG (liquefied natural gas) in 2017 to meet the mounting domestic demand by expanding the country's energy sources.
Currently, the state-run Petrobangla has been re-gasifying around 330 million cubic feet per day (mmcfd) of LNG at the Excelerate Energy's floating, storage and re-gasification unit at Moheshkhali Island in the Bay of Bengal. It is the country's first LNG import facility.
The volume of re-gasified LNG supply from the Excelerate's existing FSRU having a capacity of 3.75 million tonnes per year (Mtpa) will rise to around 500 mmcfd, once the Petrobangla increases the LNG import volume.
Excelerate Energy's vessel Excellence arrived at the Moheshkhali Island terminal on April 24, carrying 136,000 cubic metres of lean LNG from Qatar. It was due to start delivering the LNG from May 7.
Technical issues and rough seas during the southwestern monsoon season of June-August in Bangladesh, however, kept it stranded off the south coast of Chattogram for more than three months.
Excelerate Energy docked and connected the FSRU to the subsea pipeline network on August 5 and commenced injecting the gas on August 12. Commercial supply of re-gasified LNG to end users started on August 18.
Petrobangla started its regular import of LNG from Qatar's RasGas on September 9. Petrobangla has a binding sales and purchase agreement (SPA), with RasGas to buy around 2.5 million tonnes per year of lean LNG over the next 15 years.
It has also a similar SPA to import LNG at the rate of around 1.0 million tonnes per year from Oman Trading International for 10 years.
Petrobangla also has a preliminary agreement with Switzerland-based private firm AOT Energy to import around 1.25 million tonnes of lean LNG per year for 15 years.
It also signed a letter of intent with Indonesia's Pertamina to import around 1.0 million tonnes of LNG over a period of 10 years.
Bangladesh also shortlisted more than two dozen LNG suppliers to purchase LNG on a spot basis.
Bangladesh is devising a mechanism to import LNG from almost all the term-deal suppliers and some spot suppliers.
RPGCL, a wholly owned subsidiary of Petrobangla, is in charge of monitoring LNG imports and its facilities in Bangladesh.
Bangladesh Energy Regulatory Commission (BERC) in mid-October, however, turned down the tariff hike proposals of the state-run gas marketing and distribution companies as the current volume of LNG import was less than expected.
Petrobangla and its subsidiary gas companies had sought a hike in natural gas tariff calculating import of LNG to the tune of 1,000 mmcfd.
The National Board of Revenue (NBR) waived supplementary duty (SD), customs duty (CD) and lowered advance income tax (AIT) to keep the natural gas price 'rational' in the domestic market.
In the event of no hike in the gas tariff the government will need to provide subsidy worth Tk 31 billion for the Petrobangla in the current fiscal year to June 2019.
Bangladesh currently imports around 6.0 million tonnes of diesel, furnace oil, jet fuel, petrol, octane and kerosene to meet the local energy demand.
The country also imports LPG (liquefied petroleum gas), electricity and coal to meet the local demand.
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