Power production from coal up, several oil plants shut

Energy transition leads Bangladesh to plan substantial cut in import of petroleum products in 2024 as gasoil demand falls amid increasing switch to power production from coal-fired plants, sources said.

State-run Bangladesh Petroleum Corporation's (BPC) has projected import of around 6.51 million tonnes of refined petroleum products during January-to-December period this year, down 15.34 per cent from the 2023 imports, they said.

Bangladesh is currently going through an energy transition by way of reducing dependence on petroleum products of both diesel and furnace oil to generate electricity, which is trimming down its fuel consumption.

The country has already shut down six privately owned gasoil-fired power plants having the total generation capacity of around 1,000 megawatts. The laid-down plants are Jessore 100MW and Daudkandi 200MW owned by Bangla Track, Awarahati 100MW and Brahmangaon 100MW owned by Aggreko, APR Energy's Pangaon 300MW, and Paramount's Baghabari 200MW plant. The shutdown came in 2023,  according to official data available  with state-owned Bangladesh Power Development Board (BPDB).  

The power authority also grounded several furnace-oil fired-power plants and softened deals with several others under 'no electricity, no pay' mechanism, in a change from the previous binding take-or-pay provision, to reduce the fuel consumption, said a senior BPDB official.

"The country, on the contrary, is relying more on coal and imported LNG for future power generation," he added.

Four coal plants with an aggregate capacity of around 3,365 megawatts are already in operation. The 1,234MW Maitree Super Thermal Power Project, SS Power's 1,224MW plant, Barisal Electric Power Co's 307MW plant and the 1st unit of Matarbari 1200MW plant initiated electricity generation in 2023.  And the second unit of the Matarbari coal plant is expected to come online this coming March, the official lists the advances in the switch.

"These coal-fired power plants in Bangladesh alone will require around 45,000 tonnes of imported coal per day," says the official.

Experts say the import dependence for coal could be cut through mining domestic deposit of the fossil fuel discovered in huge volumes in the northern Dinajpur district.  Currently coal is extracted at Barapukuria by a Chinese company.

On the other hand, the state-run oil corporation has projected to import around 4.29 million tonnes of diesel, 630,000 tonne  of Jet A-1 fuel, 350,000mt octane, 1.15 million tonnes of furnace oil and 90,000 tonnes of marine fuel during January-December 2024.

The BPC will source around half of its total refined oils through international tenders, and the rest through government negotiations with state-run oil suppliers across the world, said the BPC official.

Separately, the country's private sector is likely to import around 3.0 million tonnes of furnace oil to generate electricity in their plants, said the BPDB official.

The state-run oil corporation will import around 1.5 million tonnes of crude oil in 2024, about 7.14 per cent higher than the crude-import volume during 2023, according to BPC.

Newly opened single-point mooring facility to import and store a significant volume of crude oil that prompted the BPC to import higher volume of crude to refine in the country's lone refinery -Eastern Refinery in Chattogram, said the BPC official.

The company imports crude from Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) to refine at its sole refinery.

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