As Bangladesh prepares for a surge in electricity consumption during the peak summer months, the government has taken an aggressive measure to assure uninterrupted power supply by dramatically increasing its imports of liquefied natural gas (LNG) from the spot market. The measure attempts to feed the country’s gas-fired power plants, which are already failing to fulfil rising energy demands due to a lack of natural gas supply.
Six LNG cargoes are planned for May, representing higher than usual imports.
The state-owned Rupantarita Prakritik Gas Company Ltd (RPGCL), a Petrobangla subsidiary, will import six LNG cargoes from the spot market in May, higher from the usual three to four cargoes imported during the same month. Each cargo will carry 32 lakh MMBtu (million British thermal units), roughly equivalent to 2,900 to 3,000 million cubic feet (MMcf) of gas once regasified.
“We will purchase six LNG cargoes from the spot market for May. We’ve already floated tenders for the purchase,” said Md Rafiqul Islam, Managing Director of RPGCL.
This increase in demand is closely linked to weather conditions. AccuWeather predicts temperatures in May will reach 35-36.5°C, up from 33-35°C in April. Some areas, such as Dhaka and Rajshahi, may experience heatwaves with temperatures exceeding 40°C, increasing demand for cooling solutions such as air conditioning and, as a result, power demand.
Read More: Dhaka, Islamabad Reopen FOC Talks After 15 Years
Tender Process and Supplier Engagement
RPGCL held two rounds of tenders to facilitate imports.
- Tenders were issued for three cargoes with delivery dates of May 1-2, 10-11, and 16-17.
- Second round (9 April): Three more cargoes will arrive on May 15-16, 22-23, and 25-26.
RPGCL has reached out to 22 pre-approved suppliers who have previously signed a Master Sales and Purchase Agreement (MSPA) with Petrobangla for spot LNG trading. The deadlines for tender submissions were 6 April (first round) and 13 April (second round).
Total Supply Still Falls Short of Demand
Even with six cargoes from the spot market, Petrobangla officials warn that this will not fully meet demand. Ideally, 7 to 8 cargoes are required in May to maintain stable supply to the power plants.
Including four cargoes from long-term contracts, the combined LNG supply is expected to total around 29,000–30,000 mmcfd. However, actual daily average supply will likely hover between 967 and 1,000 mmcfd—still short of the 1,200 mmcfd required to generate 6,500–6,700MW of electricity from gas-fired plants.
Persistent petrol shortage requires load adjustments.
Despite increased LNG imports, gas shortages are forcing the Bangladesh Power Development Board (BPDB) to operate gas-fired power facilities at reduced capacity.
“We are receiving less than 1,000 mmcfd, while we were assured of 1,200 mmcfd,” said Md Zahurul Islam, Member (Generation) at BPDB.
As a result, gas-fired facilities generate between 5,200 and 5,400 megawatts of power, increasing reliance on more expensive alternatives such furnace oil-based plants.
Oil-based electricity generating is a costly requirement.
To compensate for the gas supply shortfall, the BPDB must operate furnace oil-based power plants, particularly during peak nighttime hours (5pm to 11pm), which generate 3,000-3,500MW of electricity daily.
The cost implications are enormous.
- Gas-fired power costs approximately Tk 15 per unit.
- Oil-fired electricity costs range between Tk 35 and Tk 45 per unit.
Despite the rising costs, BPDB has little choice but to use oil-based power generation to meet demand. The peak generation from these reactors has lately reached 3,700-3,800MW, although the BPDB is attempting to curtail output to save money.
Read More: 1,000 injured Palestinians coming Bangladesh for treatment
Financial Strain Adds to Supply Challenges
The shift to more expensive fuels also puts pressure on the country’s energy finances. A Power Division official pointed out that maintaining sufficient supplies of primary fuels like oil and coal requires adequate liquidity, which is currently constrained.
“We are forced to run oil-based power plants despite their production costs being considerably higher than those of gas-fired plants,” said Zahurul Islam.
Conclusion
As Bangladesh approaches the peak summer season, with rising temperatures and soaring power demand, the government’s decision to expand spot LNG imports is a deliberate step to stabilise energy generation. However, ongoing gas shortages, high oil-based generation costs, and financial constraints make it impossible to maintain a consistent and affordable electrical supply across the country.
Source: TBS
