Reduced LNG supply leads to severe gas crisis, load shedding

Bangladesh is experiencing a severe gas crisis as the supply of liquefied natural gas (LNG) has dropped from the usual 1,050 million cubic feet per day (mmcf/d) to just 250mmcf/d in a span of just one and a half months, paralysing almost all gas-dependent sectors.

After Cyclone Remal, the country’s gas supply was already squeezed due to damage sustained by one of the two terminals, leaving just around 600mmcf/d of gas to be supplied. The two terminals together supply about 1,050mmcf/d of gas.

According to Petrobangla, the latest decline is due to damage to the 42-inch pipeline from Anwara to Faujdarhat in Chattogram on Tuesday, which has caused widespread disruption across industries in the last two days.

Gas-based power generation has decreased by 1,500MW, and load shedding reached around 2,000MW Thursday, according to the Power Grid Company of Bangladesh (PGCB).

According to PGCB, at 1am on Thursday, nationwide electricity demand was 15,000MW, but only 13,077MW was produced, resulting in a shortfall of 1,836MW. The country has an installed power generation capacity of 27,515MW.

Generally, gas-based electricity generation exceeds 5,000MW, but over the past two days, only around 3,500MW has been generated. 

On Tuesday night, Petrobangla announced in a press release that the Anwara-Faujdarhat 42-inch pipeline had been damaged. This caused an emergency maintenance situation from the Maheshkhali floating LNG terminal, leading to low gas pressure in the Bakhrabad Gas Distribution Company and Titas Gas Distribution Company areas.

Meanwhile, the repaired Summit LNG terminal, damaged by Cyclone Remal, has left Singapore and is expected to arrive in Bangladesh tomorrow, with full operations likely to resume by 17 July, according to Petrobangla sources.

The Petrobangla director, Engineer Kamruzzaman Khan, told The Business Standard, “Typically, one LNG terminal supplies around 600 million cubic feet of gas daily. However, the supply has dropped to 250-270 million cubic feet after the pipeline damage. 

“This limited supply is now being directed exclusively to Chattogram’s power plants, fertiliser factories, industrial sectors, and residential areas, leaving Dhaka and Comilla without adequate gas.”

Expressing the hope that LNG supply will resume soon, he said that efforts to repair the damaged pipeline are in full swing and the contractor has been directed to complete the task within two days.

Regarding the arrival of the Summit terminal, the Petrobangla director said, “The floating storage ballast tank departed from Singapore on 6 July and will take another five to six days to reach Bangladesh, followed by three more days for landing and commissioning. In total, it will take around nine to ten days to start operations.”

Various sectors affected by gas crisis

Gas-based industries, including those in spinning, dyeing, printing, cement, ceramics, and iron and steel, have seen production drop below 30% owing to the gas shortage. 

Approximately 700 textile factories under the Bangladesh Textile Mills Association are experiencing severe disruptions. 

Factory owners said the necessary pressure for boiler operation is 15 pounds per square inch (PSI) per cubic foot, but many have only been receiving between 1.5 and 3 PSI, with some receiving no gas at all, causing significant disruptions in production.

CNG filling stations are experiencing low gas pressure, leading to long queues of vehicles waiting for refuelling. 

Farhan Noor, secretary general of the CNG Filling Station and Conversion Workshop Owners Association, said, “CNG stations have been facing a gas shortage for a long time, and the reduction in LNG supply has worsened the crisis. Low gas pressure is causing long waiting times for refuelling, resulting in long lines of vehicles at every station.”

Sirajul Islam Molla, president of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), said, “Due to the gas crisis, most factories in Narsingdi and Gazipur are shut, causing significant daily losses. Gas is the primary fuel for ceramic production, and low gas pressure prevents proper production and affects product quality. This puts us at a disadvantage in both domestic and international markets, leading to cancelled orders from foreign companies.”

KM Selim, general manager (accounts and finance) of Modhumoti Tiles Limited in Savar, said that the firm had to shut down its factory on 1 June due to the gas shortage. “We need a minimum gas pressure of 8 to 9 PSI to keep the factory running. But the pressure has dropped to 0.5 PSI since Cyclone Remal,” he said.

The company, which employs around 400 workers, is now incurring a loss of at least Tk6 lakh daily due to the closure. 

However, this is not the first time that a disaster has disrupted gas supply from floating terminals. 

On 12 May last year, supplies from the two floating storage units were suspended due to safety concerns during Cyclone Mocha, causing a severe gas shortage in various regions, including Chattogram.

Experts are of the view that Bangladesh must build land-based LNG terminals for a long-term solution. Floating storage units are temporary fixes and cannot be a sustainable long-term solution, they added.

Regarding land terminals, Petrobangla Chairman Zanendra Nath Sarkar, said, “We have had plans for a land-based terminal since 2017. It will be in Matarbari. 

“However, the Ministry of Shipping has yet to create that channel. Their plan is for 2030 or 2031.”

“We have requested that the channel be ready by 2027 or 2028. If the Ministry of Shipping and Chattogram Port Authority can prepare the channel by 2029, we can proceed with the contract,” he added.