WoodMac: Bangladesh’s LNG demand to hit 8 mtpa after 2020

WoodMac: Bangladesh's LNG demand to hit 8 mtpa after 2020
Illustration purposes only (Image courtesy of Excelerate Energy)

Petrobangla’s deal signed last month with Qatar’s RasGas has marked Bangladesh’s official entrance into the LNG buyers club. 

The 2.5 mtpa, 15-year deal should alleviate some of Bangladesh’s supply shortages but is a far cry from its LNG ambitions, natural resources consultancy WoodMackenzie said, forecasting a more moderate LNG requirement of over 8 mtpa by early next decade.

Current demands have been estimated by the government at over 700 mmcfd, equivalent to around 5 million tons of LNG.

However, due to the lack of domestic gas production, the government has stopped building gas pipelines and has been promoting the use of LPG in residential and commercial areas over the past few years.

“On the other hand, while gas prices to all sectors have already increased twice in 2017 and averaging at around US$3/mmbtu, it still falls short of international LNG prices, making it attractive for both retail and commercial users. Currently, there is also no firm plan on gas price rationalization,” WoodMac noted.

These factors make the LNG import situation for Bangladesh more pressing.

The state-owned Petrobangla is currently in talks with a number of parties to secure both long term and more flexible options for spot LNG deliveries.

“In June, it signed an MOU with AOT to supply up to 1.75 million tons of LNG. However, the deal is still under discussion and will be a part of its spot procurement strategy,” WoodMac said.

WoodMac: Bangladesh's LNG demand to hit 8 mtpa after 2020

Conversations with key stakeholders indicate the Moheskhali FSRU, which will support its first LNG imports,  remains on schedule to begin by the end of 2018. The onshore gas pipeline connecting the FSRU from Cox’s Bazar to the main demand center in Chittagong has also been completed.

Plans are also under way to build a subsea pipeline from Moheskhali Island to the mainland gas valve. A US$180 million financing package with Excelerate for the Moheskhali FSRU has also been concluded, according to the consultancy.

With plans for another 17 mtpa of planned regas capacity via FSRUs and an onshore LNG terminal, the government is clearly in support to boost its LNG supply. Already, private capital is being attracted to this sector with the involvement of Summit Power, Reliance Power and Petronet who are looking to invest in these terminals, WoodMac said.

The consultancy expects more upside to Bangladesh’s LNG demand particularly if the 1.5 mtpa Indian piped gas import gets delayed or canceled and if its coal-fired power plants do not come online as planned.

Share this article

Follow LNG World News

Events>

<< Feb 2018 >>
MTWTFSS
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 1 2 3 4

LNG Pricing, Trading & Risk Management: 3-Day Course

This three-day training program provides a unique opportunity to learn and apply the practical skills, knowledge and tools…

read more >

Asia Pacific Maritime and Offshore Exhibition 2018

7 years in the making, APM is the premier shipbuilding & marine, workboat and offshore exhibition in Asia…

read more >

CWC 2nd Papua New Guinea Petroleum & Energy Summit

The 2nd CWC Papua New Guinea Petroleum and Energy Summit is held under the patronage of the Prime Minister of Papua New Guinea…

read more >

CWC World LNG & Gas Series: 16th Americas Summit

Now in its 16th edition, the CWC World LNG & Gas Series: Americas Summit is the longest running LNG and gas event in the Americas region…

read more >