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Supply shortfall hits gas sector

23 September 2021

Noman Mosharef :
The country's gas reserve is gradually getting exhausted for the last 1.5 decades signaling of extreme crisis in fuel sector.
At present, the average daily deficit has reached 1.3 billion cubic feet. Although the import of LNG (liquefied natural gas) has started to alleviate the crisis, 100 pc of the capacity has not been utilized so far.
The volume of imports has also been reduced as the price of LNG continues to rise in the world market. As a result, the country's industrial production is declining due to the gas crisis; power generation is being disrupted. The movement of CNG-powered vehicles has decreased. Fertilizer production, which is important for agriculture, has also declined. Households and businesses are also suffering.
Experts say that industrial production is increasing in Bangladesh as a developing country. Therefore, there is no guarantee the supply of gas as it needs. Existing domestic and foreign investors have expressed frustration at not getting the required fuel.
The government started importing LNG to increase the supply of gas. But even though it has the capacity to supply 100 crore cubic feet daily, it has never exceeded 75-80 crore cubic feet.   At present it has come down to 60-65 crore cubic feet. Again, there is no speed in implementing the plan to build more LNG terminals. Although there is a possibility of finding gas in the sea and land, exploration and excavation activities are not being carried out.
Mohammad Ali Khokon, President of the Bangladesh Textile Mills Association (BTMA), said that most of the spinning, weaving and dyeing-printing-finishing mills are run by their own power plants (captive power). Gas is the main fuel for this industry. The gas supply situation has deteriorated drastically. As a result, the textile industry, which is being run by captive power generation, has virtually stopped production.
He said that the gas supply situation has come down to the lowest level of 1.50 PSI (per square inch). As a result, 70 percent of the capacity of the machineries installed in the mills remains unused.
Policy Research Institute (PRI) Executive Director Ahsan H Mansoor said the price of electricity in the country is not as cheap as before. In order to attract investment, the price of gas and electricity must be kept tolerable. But before that, there is a need to ensure supply according to the demand. The government has to ensure this. He said the foreign investment situation in the country is worse than before.
According to the Bangladesh Oil, Gas & Mineral Corporation (Petrobangla), the daily gas demand in the country is 420-430 crore cubic feet. On September 18 and 19, about 296 crore cubic feet of gas was supplied daily. In other words, the deficit has reached 130- 134 crore cubic feet. This is the largest deficit in recent times in the history of the country.
The power plants are getting 110 crore cubic feet of gas against the demand for 225 crore cubic feet. Fertilizer factories are getting 13 crore cubic feet instead of 31 crore cubic feet. The industrial, CNG, trade, tea-garden and residential sectors are getting 163 crore cubic feet of gas. At least 10 crore cubic feet of gas is needed here. To handle the situation, CNG fuel stations have been shut down for four hours daily since last Sunday. However, the people concerned have said that it will not come up with a sustainable solution.
According to the Department of Energy and Mineral Resources, Petrobangla and Power Development Board (PDB), the country's current annual demand for gas is 1.56 trillion cubic feet. In contrast, 1 lakh 10 thousand crore cubic feet is being supplied. Of these, 43.28 per cent are in power generation, 15.79 per cent in industry, 15.25 per cent in households, 15.12 per cent in industrial power plants (captive power), 5.54 per cent in fertilizer production, 4.16 per cent in CNG stations and 0.76 per cent in commercial and . 10 percent gas is used in tea gardens.
State Minister for Power Nasrul Hamid recently said about the gas supply situation, the supply is now less than the demand for gas. Many industries are not being connected due to lack of adequate supply. Initiatives have been taken to increase LNG imports to address the deficit. Efforts are also being made to increase collection from domestic sources. Although the price of LNG has gone up, there is a demand for it in the industry.
 Even though the cost is high, traders now want gas. They have that ability. The government is trying to provide accordingly.
According to a recent report by the Department of Energy, the current production of domestic gas is 240-250 crore cubic feet, while the daily production of gas may come down to 230 crore cubic feet this year. If no big gas field is discovered, the production from the country's gas fields could be reduced by 18.4 crore cubic feet in 2022-23. Daily production may decrease by 43.5 crore cubic feet in 2023-2024.

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