LNG Supply Uncertainty Prolongs Gas Crisis
The gas crisis in Bangladesh is intensifying again as LNG carriers are not arriving on time, forcing Excelerate Energy’s terminal in Maheshkhali to suspend operations. The country had already faced a 27-day gas crisis following a mysterious fire at the Excelerate terminal. Supply increased for two days, bringing some relief, but the crisis has worsened again due to delays in LNG shipments. The shortage is increasingly affecting industries, CNG filling stations and households. To ensure faster supply, the government had ordered LNG cargoes through direct procurement without tenders. Four cargoes were scheduled to arrive in August, but none had reached the country by Tuesday. It is also uncertain when they will arrive, creating further uncertainty over gas supply.
In response, the government has taken steps to purchase five additional LNG cargoes through emergency tenders. However, while bids were received for two cargoes, no companies submitted offers for the remaining three. The LNG stored at the Excelerate Energy floating terminal is also running out. Officials said no LNG carrier is expected to arrive before August 23. As a result, the severe gas crisis could continue for another week. To manage the situation, the government decided at an emergency meeting on Monday night to purchase two LNG cargoes from the spot market. Due to the lack of LNG cargoes, gas supply from Excelerate Energy’s floating terminal has fallen sharply. With its stock nearly exhausted, the terminal is supplying only around 50 million cubic feet of gas to the national grid. Including supply from Summit’s floating terminal, LNG-based gas supply to the national grid stood at only 536 million cubic feet, while domestic sources supplied 1,605 million cubic feet.
According to officials, several LNG cargoes were purchased through direct procurement under unusual circumstances following political lobbying. However, the suppliers failed to deliver the LNG on time, creating the current crisis. Excelerate Energy’s terminal is expected to run completely out of gas today. If the scheduled cargo does not arrive on August 23, the crisis will become even more severe. A cargo was scheduled to arrive on Monday but did not. In addition, the US-based Excelerate Energy, which operates the LNG terminal, refused to receive an LNG carrier from Saudi Arabia. The company declined to accept the cargo, citing safety risks. This has further contributed to the cargo shortage.
Normally, Bangladesh imports around 10 LNG cargoes each month. Due to problems at the terminal, nine cargoes were scheduled for August. Of these, three were purchased through tenders, one under a long-term contract, one under a short-term contract and four through direct procurement. Of the three tendered cargoes, two have already supplied gas, while the third is scheduled to arrive on August 23. Bangladesh has also received one cargo from Qatar under a long-term contract. Another LNG carrier from Saudi Aramco under a short-term agreement reached the Bay of Bengal. However, the terminal operator refused to receive LNG from the vessel, citing risks associated with transferring the cargo. The vessel is now returning.
Meanwhile, the government is purchasing two additional LNG cargoes at a cost of Tk 1,850 crore. At the 38th meeting of the Cabinet Committee on Government Purchase on Monday, the Energy and Mineral Resources Division proposed purchasing a total of five LNG cargoes. According to officials, the LNG will be purchased from Singapore-based BP Singapore Limited at a total cost of around Tk 1,851 crore. The first cargo is scheduled to arrive in Bangladesh on August 23-24, while the second is expected to be supplied on September 4-5.
