Imported LNG to end gas crisis

kmanik-1995.blogspot.com
KM ANIK
24 UPDATE 

28/10/2017 

Country Bases  CNG Qatar

Reported in BANGLADESH

Good news: Annual Import of US$3 billion Liquefied Natural Gas (LNG) is to ease the decades-long gas crisis of the country. Import will start in April, 2018 and by October more than one third of the country's gas needs would be imported in the form of Liquefied Natural Gas (LNG).

Bad news: to cover the cost of the pricy LNG import, the government may have to hike the gas price by as much as double—which would result in cost hike in all sectors: power, captive power, fertiliser, industry, commercial, CNG, tea gardens and domestic.

The annual US$3 billion import bill for the LNG would also take out a sizable chunk from the country's foreign currency reserve.

According to an analysis of Petrobangla, the bulk price of per million cubic feet per day (mmcfd) gas for power, fertilizer, industry or commercial sectors would have to be increased by one third to double.

Such an increase would make life costlier, as the overall production cost would go up at all levels.

In spite of this burden, the overall result is going to be positive as the import of 1000 mmcfd gas could help produce almost 5000 megawatts of power—which is about half of what the country produces today. Petrobangla concludes that the contribution of this gas to the GDP is equivalent to Tk 2,76,000 crore.

In simple terms, the supply of gas would result in full swing production at the industries, power plants, fertiliser factories and any other economic activities.

The country presently produces and supplies around 2700 mmcfd of natural gas which is 800 mmcfd short of actual demand, according to Petrobangla. Many power plants cannot run in full capacity, many industrial units cannot function optimally and many fertiliser plants remain shut down for several months due to the shortage.

The government recently signed an agreement with Qatar to import the LNG based on a pricing formula.