Reacting to crippling fuel shortages, Bangladesh has been active to expand its LNG import capability: Two FSRUs with more than 3 mtpa capacity will be in place by February 2019, and another three 1.5 mtpa LNG import barges by March 2019.
Five new FSRUs under construction
Moheshkhali FSRU (3.5mtpa) will be the country’s first LNG import facility, scheduled to dock on 23 April, laden with a Qatari cargo. Summit Power is developing a 3.75 mtpa FSRU also offshore Moheshkhali which is due operational in February 2019. Furthermore, two small-scale FSRUs of 1.5 mtpa each were agreed to be developed at the port of Chittagong in September 2017, backed by the trading houses Gunvor and Trafigura.
Given the timings for start-up of those various FSRUs and combined-cycle gas turbine (CCGT) power plant projects, Energy Aspects forecast LNG imports of 2.7 mtpa in 2018 and 7.0 mtpa in 2019.
“With this expected level of LNG imports, gas shortages at current levels will be resolved,” Sikorski commented, pointing out Bangladesh has all but secured contracts to import around 7 Mtpa and is in advanced negotiations for another 1.25 mtpa.
LNG imports designated for power sector
The power sector currently is Bangladesh’s biggest single gas user, responsible for around 1.1 bcf/d (41%) of annual consumption for grid power companies and another 0.44 bcf/d (16%) used by industry for onsite gas-fired generators.
Through to 2020, electricity demand is forecast to grow by around 8 TWh/y each year, taking it 22 TWh/y higher than in 2017. Of that incremental demand growth, coal will add 9.1 TWh/y of electricity supply, meaning that gas-fired plants will have to supply 12.6 TWh/y more power than in 2017. According to Energy Aspects calculations, this will result in additional gas demand of 2.4 bcm in 2020, compared with 2017-levels, if all of the new gas-fired plants are operating baseload.
Though LNG imports will bring some relief, increases in gas-fired power generation capacity are likely to be limited to 1.0 GW in 2018, and 1.4 GW in 2019.
Alleviation of prevailing gas shortages in power generation could add some 0.2 bcf/d to gas demand, says lead analyst Trevor Sikorski. “The biggest impact,” he says, “would be felt in a significant reduction in oil-fired generation, which is the second-biggest fuel source in Bangladesh.”
In its latest country report, Energy Aspects has identified 11.5-GW of projected gas-fired capacity of which 2.7 GW is under construction, plus 14 GW of projected coal-fired capacity and a 2.4 GW nuclear power project in Rooppur. Assuming all projected new gas generation capacity will be built this would herald an annualized 2 mtpa of LNG import demand.
Further incremental rise in demand is possible, but would require either a decline in domestic production, expansions in industrial gas demand or further expansions of gas-fired power. “All three of these are likely,” he said but cautioned “the main headwind to growth in gas demand is the addition of coal-fired power, although only 1.3 GW is expected online in the next two years.”