[🇧🇩] Energy Security of Bangladesh

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[🇧🇩] Energy Security of Bangladesh
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Bangladesh eyes to procure 5 spot LNG cargoes in May
FE ONLINE REPORT
Published :
Apr 15, 2025 19:59
Updated :
Apr 15, 2025 20:17

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Bangladesh is eyeing to import five spot liquefied natural gas (LNG) cargoes in May to meet mounting summer demand.

State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) has already bought two spot LNG cargoes and sought to buy three more from spot market for May delivery windows, a senior RPGCL official told The Financial Express Tuesday.

The tender evaluation committee is currently evaluating three tenders for May 15-16, May 22-23 and May 25-26 delivery windows.

The country’s energy demand has gone up from early April with the advent of summer and is expected to grow further with the rise of mercury.

Bangladesh bought four spot LNG cargoes for the delivery windows of the past two months – April and March.

The bid winners will deliver the LNG cargoes at Moheshkhali Island in the Bay of Bengal, with options to discharge the cargo at either of the country’s two floating storage regasification units (FSRUs) located on Moheshkhali Island.

The RPGCL, a wholly owned subsidiary of state-run Bangladesh Oil, Gas, and Mineral Corporation, or Petrobangla, looks into LNG trades in Bangladesh.

The volume of each of the spot LNG cargoes will also be around 3.36 million British Thermal unit (MMBtu).

Bangladesh previously awarded its latest spot LNG cargo tender to TotalEnergies Gas and Power Ltd for May 10-11 delivery window at $12.68 per MMBtu.

It currently imports LNG from Qatar Energy and OQ Trading international under long term deals and purchases LNG also from spot market to re-gasify LNG in its two operational FSRUs having the total capacity of 1.10 billion cubic feet per day (Bcfd).

The country has been reeling an acute energy crisis as its natural gas output is depleting.

Bangladesh has been rationing gas supply to industries, power plants and other gas-guzzling industries to cope with the mounting demand.​
 

Gas price increase for industries unjustified, discriminatory
16 April, 2025, 00:00

AN INCREASE of 33 per cent in prices of gas for use as raw materials and captive power in the industrial sector that the Energy Regulatory Commission announced on April 13 with an immediate effect is worrying for industries that plan to get new connections or expand their consumption. The plan is discriminatory. The increase will force factories seeking to use gas for captive power generation to pay Tk 42 a unit in place of Tk 31.50. Old captive power producers seeking to use more gas to increase their present capacity would need to pay keeping to the new rates. The industries that would seek new connections would need to pay Tk 40 a unit instead of the previous Tk 30. The existing industries seeking to increase consumption would need to pay at the new rate for the additional supply. The industries in the process of getting new connections would need to pay for a half of the sanctioned limit at new rates and for the other half at the previous rate.

But for Petrobangla which proposed a 152 per cent increase in gas prices aimed at generating Tk 32.4 billion, all other stakeholders at the public hearing on February 26 expressed their strong disapproval, noting that the interim government was following in the footsteps of the Awami League government, which was overthrown in a mass uprising in August 2024 that flared up from protests against discrimination in civil service recruitment in July that year. The stakeholders who attended the hearing were surprised at the commission’s convening the public hearing on grounds of reducing deficits of public companies. Whilst the government remains unwilling to improve the efficiency of the agency and end corruption and irregularities in the process, industrialists have earlier noted that it appears something like resolving the issue by arbitrarily increasing prices. And, industrialists, who at the time of the public hearing said that such a government move would increase production costs that would eventually fall on consumers, add another reason to their argument against gas price increase, saying that the price increase for new and old industrial gas connections and for the use of gas for captive power would discourage fresh investments, especially at a time when the government is trying to attract investments. Businesspeople say that a profit-first mentality has driven the government move, but it benefits neither consumers nor industries.

The government should dispense with the discrimination in the gas price plan. But, it had better not increase gas prices at such a time and, first, put in some efforts to improve efficiency and end corruption in the agencies involved and the process before going for gas price increase.​
 

Titas Gas continues crackdown on illegal gas connections
Published :
Apr 16, 2025 22:49
Updated :
Apr 16, 2025 22:49

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Titas Gas Transmission and Distribution PLC continues its drive to identify and remove illegal gas connections.

As part of a regular operation, a mobile court led by executive magistrate Milton Roy from the Energy and Mineral Resources Division conducted an eviction drive on Tuesday in the Jamgora and Itkhola areas of Ashulia, under the jurisdiction of the Jobio-Ashulia regional sales division of Titas Gas, Savar, UNB reports.

During the operation, around 500 illegal residential gas burners were disconnected, and 400 meters of pipeline were removed and seized.

According to Titas Gas officials, the initiative will save approximately 11,334 cubic feet/hour of gas.

Through mobile court proceedings, three commercial entities — Mokka Hotel & Chandpur Restaurant, Madina Hotel, and Gaibandha Hotel — along with two illegal consumers, Abdul Wahab Mir and Humayun, were fined a total of Tk 1.25 lakh, which was collected on the spot.

On the same day, another mobile court led by senior assistant commissioner and executive magistrate Nazmul Huda conducted a similar operation under the Jobio-Araihazar regional sales division of Titas Gas in areas including Kalibari Bazar, Satyabandi, and Duptara in Araihazar, Narayanganj, spanning 2.5 kilometers.

The operation resulted in the disconnection of around 820 illegal residential gas burners and the seizure of 110 feet of MS pipe, one package burner, and one booster. No fines or arrests could be made in the illegal factory found during the operation, as no responsible individuals were present at the scene.

Additionally, under the supervision of the regional revenue branch, Narayanganj, connection disconnection operations were carried out by five special teams in Hossain Nagar, Kashipur, and Fatulla areas of Narayanganj.

Due to unpaid gas bills, gas connections were disconnected in three households with six double burners.

For using gas in unauthorized extensions, 10 residential connections with a total of 99 double burners were disconnected. Furthermore, due to complete illegal usage without customer signal IDs, 10 illegal gas connections were disconnected, which included 33 double burners.

Titas Gas officials said that from September 2024 to April 15, 2025, a total of 29,617 illegal gas connections have been disconnected, including 230 industrial, 155 commercial, and 29,232 residential connections.

Additionally, 67,212 burners have been disconnected, and 144 kilometers of gas pipeline have been removed during this period.​
 

Gas price hike couldn't come at a worse time
Atiqul Kabir Tuhin
Published :
Apr 16, 2025 23:41
Updated :
Apr 16, 2025 23:41

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The government's decision to raise gas prices for new industries by an average of 33 per cent, defying strong opposition from industrialists and business leaders, is being widely criticised for a multitude of reasons. First of all, the industrial gas tariff hike came amid the country's bleak investment scenario and macroeconomic vulnerability, and thereby, may put further damper on new investment.

Currently, several key economic indicators that reflect a country's investment scenario are on a downward trend. According to the latest data from Bangladesh Bank, private sector credit growth fell to a decade-low of 6.82 per cent in February, driven by declining loan demand from businesses. Another key indicator reflecting the investment climate is the import of capital machinery, which dropped by 30.10 per cent in the first eight months of fiscal year 2024-25 (July to February), compared to the same period last year. An investment slowdown, weak private credit growth, and reduced imports of capital machinery often go hand in hand.

Foreign direct investment has also experienced a sharp drop in the first half of the current fiscal year. In July-December period of FY2024-25, overseas investment fell by more than 71 per cent compared to the same period in the previous year.

These facts and figures make it amply clear that a red light is flashing on the country's investment dashboard. In this context, when investors are already unnerved by high interest rates, prolonged political uncertainty, and persistent high inflation, the increase in utility prices comes as yet another blow. The decision is feared to further dampen the already subdued investment climate, hinder industrial growth, impede job creation, and slow down economic recovery.

Then again, the new tariff is discriminatory. Introduction of a discriminatory tariff in the industrial sector by none other than a government that came to power riding on the back of an anti-discriminatory movement is the last thing one would have expected. But this is what has just happened.

As per the Sunday's announcement of the Bangladesh Energy Regulatory Commission (BERC), new industrial units will have to pay Tk 40 for per cubic metre of gas instead of Tk 30. Similarly, new captive power users will have to pay Tk 42 per cubic metre, which was previously Tk 31.5. The existing consumers will have to pay at the previous rate, but in the case of using gas beyond their sanctioned load, they will have to pay following the new tariff. Moreover, those who have received primary approval for new connections will have to pay new tariff if their usage exceeds 50 per cent of their sanctioned load.

As things stand, as per the BERC pricing structure, older factories, along with household, commercial users, and CNG filling stations, will continue to receive gas at previous rates, while new industrial units-as well as existing ones that decide to increase production-will have to pay significantly higher prices for this essential fuel. Business leaders rightly question the rationale behind applying different fuel rates for the production of similar goods within the same sector. Thanks to this discriminatory policy, new businesses will face significant challenges in competing with their established counterparts. Consequently, it will push new investors at the back foot and may even compel them to put their business expansion plan on hold as they will face added cost pressure and uneven competition.

The timing of the utility price hike is also being questioned, as it runs counter to the government's recent efforts to boost investment. It came at a time when the government is trying to rope in more foreign investors. Notably, the announcement was made just a few days after the conclusion of a major investment summit in Dhaka attended by over 500 foreign investors from around 50 countries. Many argue that it could potentially send a wrong signal to potential investors about the country's policy unpredictability.

The previous Awami League government, with the promise of providing uninterrupted supplies, had raised gas tariffs for small and cottage industries by 178.29 per cent to Tk 30 per cubic meter from Tk 10.78 in February 2024. Rates for captive power plants, small power plants and merchant power plants were raised by 87.50 per cent to Tk 30 per cubic meter from previous Tk 16. Despite this substantial price hike, the government failed to deliver the promised uninterrupted gas supply.

Bangladesh has witnessed a substantial hike in energy prices, apparently due to the policy failures of the previous government. Instead of prioritising the exploration of new gas fields, the government chose to import expensive LNG-allegedly to benefit certain cronies in the energy sector. To make matters worse, when LNG imports began in 2018, global gas prices were still at tolerable levels. However, the Russia-Ukraine war caused prices to surge worldwide. This, combined with exchange rate volatility and a persistent dollar crisis, has further aggravated the situation for Bangladesh.

Now, the pressing question is whether the current interim government will continue with the same flawed energy policies of its predecessor or chart a new course - one that would incorporate forward-looking strategies and prioritise the optimal utilisation of the country's onshore and offshore gas reserves.

Another critical challenge is the excessively high rate of system loss. At present, the technical loss rate of gas in Bangladesh stands at around 3 per cent-far above the international standard of 0.20 to 0.30 percent. Allegations have it that gas stolen through illegal connections is being passed off as technical loss. In just the first six months of the current fiscal year, 1.37 billion (137 crore) cubic meters of gas were lost due to system loss. With Petrobangla spending Tk 79.34 to import and supply each cubic meter of gas, the financial loss from this wastage amounts to Tk 108.7 billion. Reducing this excessive level of system loss could save the country billions. This is where the authorities should focus instead of burdening industries with steep tariff hikes that threatens future growth prospects.​
 

'Energy dominance agenda' and the catastrophic global warming
Mushfiqur Rahman
Published :
Apr 17, 2025 21:39
Updated :
Apr 17, 2025 21:39

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The new US 'reciprocal tariff' policy announced on April 2, 2025 has shaken the global trade systems and escalated tensions across the globe. It has been interpreted that the Trump administration wanted to increase US exports primarily to reduce the existing trade imbalances among the commodity exporting countries and the USA.

The USA has been encouraging the increase of American export including the US energy export all over the world. Despite the sweeping package of imposed new tariff (President Trump's newly announced tariff has a minimum 10 per cent universal rate) on US imports, energy commodity imports received an exemption. Fossil fuel lobby groups in the USA had expressed their satisfaction and decided to welcome President Trumps' decision to exclude oil and natural gas from the new tariff. Within a short period of the President Trump's new import tariff policy announcement, globally fossil fuel prices started to decline (though the US new tariff policy would not apply directly to many oil and gas products). Demands for crude oil has been declining in the global market as the US exports increases and Chinese demands declining.

In the meantime, India and the USA have agreed to significantly increase the supply of oil and gas from the USA to the Indian market. At the end of the Indian Prime Minister Mr. Modi's US visit on February 14, 2025, it was stated that the US would be 'a leading supplier of crude oil and petroleum products and liquefied natural gas (LNG) to India'. Earlier international media reported that the Republic of Korea, the third largest LNG importing country of the world expressed its intention to buy more US oil and gas to reduce the existing trade surplus with the USA and improve energy security. Japan, the largest LNG importer of the world wanted to increase its LNG purchases from the USA to diversify its supply sources. Lorne Stockman, research director of the Oil Change International, a research and advocacy organisation for transition to clean energy suspected that the 'US seeks to either flood markets with cheap fossil fuels, or bully countries into buying more of its fossil fuels, or both.' It may be recalled that the USA is the largest oil and gas producer in the world. President Trump's 'drill, baby, drill' slogan is primarily aimed at ramping up fossil fuel extraction. AP report (February 15, 2025) suggests that the Trump administration announced the conditional export permission for a huge LNG project in Louisiana, USA (President Biden administration paused the project a year ago). President Trump has been encouraging for increased US energy productions, particularly fossil fuels and remove regulatory barriers that may slow down the increment. President Trump was delighted that the United States was blessed with 'liquid gold' and urged energy companies to sell more oil and gas to allies in Europe and around the world. As per published reports, President Trump stated 'we are going to make more money than anybody has ever made with energy.' He further explained, 'We're lucky to have it. I call it liquid gold under our feet. And we're going to utilise it.'

The shale fracking technological revolution helped the United States significantly increase natural gas and LNG productions in the mid-2000s. Natural gas productions in the USA surged dramatically and climbed 50 per cent from 2005 to 2015 and oil production doubled during 2009 to 2019. This production boom in the domestic market helped the Trump administration to promote 'energy dominance' agenda for the USA. The said agenda emphasised expanded fossil fuel production, deregulation and the use of US energy exports for 'economic strength and geopolitical leverage'. President Trump's 'energy dominance' strategy inadvertently would boost global oil and gas supply. Trump administration hopes that the USA's increased exports of oil and gas (and LNG) will reduce OPEC+'s groups bargaining power. It will help the USA 'to reshape global energy geopolitics and shifting US energy policy from dependency to strategic power.'

Trump administration has notified the United Nations of its withdrawal from the Paris Climate Agreement. 'The Guardian' reports (March 10, 2025) that Mr. Chris Wright, the US energy secretary stated that 'the Trump administration will end the Biden administration's irrational, quasi-religious policies on climate change that imposed endless sacrifices on our citizens.' He further stated that 'the Trump administration will treat climate change for what it is, global physical phenomenon that is a side-effect of building the modern world.' He added, 'everything in life involves trade off,'

Inevitable consequences of President Trump's energy dominance policy will be the weakening of the global efforts to 'transition away from carbon intensive energy'. Environmental rollbacks could delay the transition to clean energy solutions, net zero target achievements. Climate experts have been raising alarm that delaying actions to limit global warming would make the problem 'more dangerous and harder to solve'. If the world increases fossil fuel use including in the USA, the rate of global warming will move to the wrong direction. Already President Trump's 'drill, baby, drill' pledge is attracting other countries to reciprocate. As an example, Indonesia has hinted that it may follow the suit of the US administration policy. As reported by the news agency 'Antara', the Indonesian special envoy for climate change Mr. Hashim Djojohadikusumo raised question, 'if the United States does not want to comply with international agreement, why should a country like Indonesia comply with it?' It may be mentioned that the per capita production of carbon in Indonesia is three tons while in the USA it is 13 tons.

The energy dominance doctrine of the US administration may attract investment to increase fossil fuel energy and create job opportunity for Americans. However, it will further escalate climate change induced sufferings for the world, primarily for the most vulnerable nations.

Mushfiqur Rahman is a mining engineer. He writes on energy and environment issues.​
 

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