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Managing fuel dearth amid price spiral

Govt cuts spot LNG import

| Updated: June 21, 2022 20:31:40


Govt cuts spot LNG import

Fuel frugality already shuts shops after 8pm across Bangladesh and now comes curbs on gas import under government austerity action to save country's foreign-exchange reserves at a time of global commodity market volatility.

Officials say the government mulls over trimming down the import of expensive liquefied natural gas (LNG) from the overheated spot market.

State-run Petrobangla expects to import less LNG during the period as austerity to conserve power and energy started Monday.

"We've not yet decided how many LNG cargoes we will cut but will surely slash the import of LNG from spot market as much as possible as the new austerity measure will reduce consumption of LNG," says a senior Petrobangla official.

The decision on cutbacks on the spot LNG cargoes will be taken calculating the new LNG-consumption pattern under the austerity measure, he adds.

The new thrift measure ordering mandatory closure of the country's all shops and shopping malls has been taken to reduce consumption of imported petroleum products and LNG.

Shops and shopping malls could stay open until 10:00 pm before implementation of the austerity measure.

The country's kitchen markets, transport services, emergency-service providers and restaurants are, however, exempt from the shopping-time curtailment and can remain open beyond the 8:00pm deadline.

It was, however, not clear how much money Bangladesh would be able to save under the new containment measure.

Bangladesh has purchased its latest spot LNG cargo for June 22-23 delivery at the Moheshkhali floating, storage and regasification unit at $24.75 per million British thermal unit (MMBtu) to Gunvor Singapore Pte Ltd. for a 138,000-cubic-meter cargo.

The country has not yet purchased a single cargo from spot market for July delivery.

Bangladesh's overall natural gas supply now hovers around 3,100 million cubic feet per day (mmcfd) with re-gasified LNG at around 800 mmcfd, against a total demand for over 4,100 mmcfd, according to Petrobangla.

The country imports five to six cargoes every month from two long-term LNG suppliers-- Qatargas and Oman Trading International, or OQ--which currently cost around $14 per MMBtu.

Bangladesh previously had imposed a daily four-hour gas rationing for industrial clients for 10 days in April despite protests from business enterprises to cope with the mounting demand for natural gas.

Petrobangla and its subsidiary gas companies had restricted natural gas consumption from 5:00 pm to 9:00 pm daily for industries during the rationing.

Although initial decision was to continue gas rationing for 15 days, the government backed down and withdrew it after 10 days due to businesses protests and increase in the country's overall natural gas output.

An abrupt fall in gas supply from the country's largest producing Bibiyana gas field, operated by US's Chevron Bangladesh outfit, prompted the government to go for the gas rationing.

The US oil major, Chevron, had shut six producing gas wells on April 3 citing technical fault.

Supply from Bibiyana had then dropped as low as to around 800 mmcfd from 1,275 mmcfd, which had mounted consumer sufferings with low gas pressure and power outages.

Chevron Bangladesh could resolve the technical anomalies and resumed natural gas production from damaged wells during late April.

A six-hour gas rationing for compressed natural gas, or CNG, filling stations from 5:00 pm to 11:00 pm daily is, however, still in force under a separate austerity measure to conserve power and energy.

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