Home ›› 29 Aug 2021 ›› Front
The under construction eight liquefied natural gas (LNG) based power plants may face production uncertainty because of unavailability of LNG gas as government is trying to source LNG from volatile spot market which will add further financial burden to the exchequer.
The Power Division is currently constructing eight LNG-based power plants with a cumulative generation capacity of 3,471 megawatt of electricity which will be commissioned by 2022.
To feed those power plants, Petrobangla signed a number of contract deal with many global LNG suppliers including 18 spot market suppliers which irked the energy expert of the country as price of LNG is marked upward trend over the last few years.
The under construction power plants are 200 megawatt Ghorashal Unit-4, 100 megawatt Shahjibazar, Bibiana South, 206 megawatt Ghorashal Unit 3, 400 megawatt Ashuganj power plant, 880 megawatt Rupsha power plant, 584 megawatt Meghnaghat and 718 megawatt Meghnaghat – all will be commissioned in September and in August 2022.
The upward trend of LNG price in global market is reported in a report of Institute for Energy Economic and Financial Analysis released on January 2021.
According to the report, “Emerging markets such as Vietnam, Pakistan and Bangladesh, amongst others, that are looking at Liquefied Natural Gas (LNG) to provide a source of power, will be faced with more volatile and also higher prices”.
“Vietnam, Pakistan and Bangladesh have over US$50 billion of proposed gas-fired power projects at risk of cancellation from unaffordable LNG prices. The extreme volatility of spot prices combined with the increasing volatility of contract prices will see many projects become unbankable” the report adds.
According to S&P Global Platts, a leading independent provider of information and analytics for the energy and commodities in January, 2021 reported that, Asian spot prices for liquefied natural gas (LNG) jumped nearly 50 per cent a record high price spiral since 2009 as Asia LNG-AS was sold at around $21.45 per million British thermal units (mmBtu), up 47 per cent from the previous week ($14.60).
The government is building two land based LNG regasification plants—one at Payra, and another at Maheshkhali with 1,000 mmcfd capacities, which are behind schedule as installation of land based LNG terminal is a time consuming matter.
Power division officials said, construction of these two land based LNG terminals will take 3 to 4 years and will not be completed within the scheduled time of commission of those power plants.
Energy expert said, government should focus on exploring new gas well in off-shore and on-shore to reduce dependency on the expensive import based LNG. Before constructing power plants, we should ensure the supply of fuel and handling of the fuel to the power plants otherwise plant will remain idle exacerbating the financial loss.
Energy expert, Prof Ijaz termed the LNG price volatile, saying the country’s dependency on LNG for power plants poses a risk as market has been very volatile over the last two years. Because of unplanned power plants, BPDB is incurring huge loss as around half of the generation capacities remain idle because of lack of demand”.
“We should focus on exploring offshore drilling instead of onshore one as gas reserve is depleting fast. Our energy sector can’t depend on the import.” he asserted.
Power Cell Managing Director Mohammad Hossain, however, maintained that the government has a concrete plan for LNG-based power plant as it is in contact with the suppliers to meet the future demand.
“Considering the future demand in mind, a 7.5-million ton per year capacity land-based LNG terminal is underconstruction at Matarbari in Cox’s Bazar. Besides, the government has the plan to buy LNG from spot market,” he said.
“We are not dependent on LNG import alone. Work is underway to explore off-shore gas well in the Bay of Bengal. We have awarded contracts to some international agencies to this effect.”
Bangladesh inked long-term deal with Qatargas to provide at least 2.5-million tonnes of LNG per year for 15-years and 10 years long term agreement with Oman’s Oman Trading International (OTI) to provide 1.0 million tonnes of LNG per year.
There are two 3.75 million tons per year capacity floating, storage, re-gasification units (FSRUs) LNG terminals at Moheshkhali currently in operation.
According to Bangladesh Power Development Board, there is a 20,383 megawatt generation capacity in the country and 53.86 per cent is occupied by gas-fired power plant.
Last year the net power generation was 71,419 MkWh and 71.82 per cent of electricity was sourced from gas fired power plants.
