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Export earnings slow despite increase in LNG imports
Natural gas crisis is deepening across the country. Despite being expensive and risky, the government is largely depending on LNG imports to resolve the ongoing crisis. The Ministry of Power, Energy and Mineral Resources has taken a plan to import 1,500 to 2,000 million cubic feet (MMCF) LNG by 2025. For this purpose, it will need $12 billion yearly.
The disclosure was made at a dialogue titled ‘’Energy Strategy: Towards a Predictable Future” organised by Dhaka Chamber of Commerce and Industry (DCCI) at its office in the capital on Saturday.
In his presentation, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said it will require huge investment in setting up of a land-based and two floating storage regasification units (FSRUs) for import of a large volume of LNG.
However, the junior minister has shown frugality in the cost of own gas exploration. He said there is disagreement among experts about domestic gas reserves. Drilling gas wells is time-consuming with each well exploration costing between $9 and $21 million. Out of 10 wells, gas is found in 3-4 wells. But a lot of money is spent on gas exploration. He expects only 500-600 MMcf/d gas will be added to national grid from domestic sources by 2025.
During that time, total gas demand in the country will rise to 4,000 MMcf/d. By 2030, the demand will increase to 5,000-6,000 MMcf/d, more than half of which will be met by LNG, he said.
Nasrul Hamid in his presentation mentioned that discussion on two more long-term contracts with Oman and Qatar for LNG supply is ongoing.
Mollah Amzad Hossain, editor of Energy and Power magazine, said at the programme that lots of dollars are needed to buy LNG, coal, liquid fuel and gas from IOCs. In the meantime, the government is struggling to provide USD. Energy import costs are increasing but export earnings are not growing.
As a result, this cost will increase in the future. Then the problem will get worse if export earnings do not increase.
Gas pilferage and unplanned industries
Nasrul Hamid said at present, gas is being imported at high price and supplied to the industry, but this valuable gas is being stolen by the factories of many powerful businessmen. They are using illegal line. Other traders are not getting gas due to illegal gas connections.
Besides, the state minister said industries have been set up in an unplanned way in different parts of the country, including Savar, Ashulia, Gazipur, and Narayanganj. As a result, there is a lot of gas system loss annually and the cost of pipeline construction increased. He urged the industry owners to shift their industries to the economic zones to avail uninterrupted power and gas supply.
Sell clothes at higher price
Nasrul Hamid said the government has decided to stop providing subsidy on gas and electricity because the poor do not get the subsidy benefits. The industrialists, and garment owners are getting the benefits of subsidy. Everyone in the world knows that the price of energy has increased. “You charge higher prices from Europe-American buyers.”
Nasrul Hamid also said that the government is adjusting the domestic energy prices with the global market to reduce pressure on subsidy. He said energy and power prices change every hour and every month in India. “We will have the same here. After that, if the government thinks that subsidy should be given to someone, then it will be given.”
A new gas network
Nasrul Hamid in his presentation mentioned that Matarbari in Cox’s Bazar and Payra in Patuakhali will be the energy hubs of the country. A new gas network is being built in the country from Payra Land-Based LNG Terminal to Mymensingh via Khulna, Jashore, Rajshahi and Rangpur. Besides, initiatives have been taken to supply Bhola gas in the form of CNG to the pipeline.
