53 Power Plants to Receive 2 Lack Tonnes of Furnace Oil

Amid the ongoing gas crisis in the country, most gas-fired power plants have had to remain shut. In this situation, the Bangladesh Power Development Board (BPDB) has taken an initiative to keep 53 furnace oil-fired power plants operational to help manage the electricity crisis. For this purpose, the BPDB has sought 204,100 tonnes of furnace oil from the Bangladesh Petroleum Corporation (BPC).

The combined generation capacity of the 53 public and private power plants is 5,538 megawatts. Due to the shortage of furnace oil, most of these power plants are currently being operated for limited periods during peak hours. This is increasing load shedding. The authorities are now taking steps to keep these plants running continuously to ease the crisis.

Gas Crisis Worsens Power Shortage

The combined generation capacity of gas-fired power plants in Bangladesh is 12,154 megawatts. Keeping all these plants operational requires 2,500 million cubic feet (mmcf) of gas. It is not possible to supply such a large volume of gas at the same time. The country has been facing a gas crisis for a long time. The crisis has worsened over the past two months due to disruptions in LNG imports. As a result, most gas-fired power plants have had to remain shut. This has pushed the country’s electricity crisis to a critical level.

According to Power Grid Bangladesh, electricity demand stood at 15,790 megawatts on the evening of September 6. Only 13,618 megawatts could be supplied, resulting in 2,122 megawatts of load shedding. Production at several power plants was also affected by coal shortages, in addition to the gas shortage.

Against this backdrop, the authorities decided to operate furnace oil-fired power plants to manage the situation. The plan is to generate an average of around 4,000 megawatts of electricity per day from these plants in September. For this purpose, the BPDB has requested 204,100 metric tonnes of furnace oil from the BPC.

BPC Faces Challenge in Meeting Demand

However, BPC sources said meeting such a large demand would not be easy. During the first five days of this month, the BPC sold 31,902 tonnes of furnace oil across all sectors. At the end of September 5, the available stock stood at 14,751 metric tonnes. During the remaining days of the month, the BPC is expected to receive 100,000 tonnes through imports and another 25,000 tonnes from local sources.

As a result, under the current plan, the total amount of furnace oil available for supply throughout September is expected to reach around 171,653 tonnes. The BPDB’s demand alone is 32,447 metric tonnes higher than this amount, without considering demand from industries and other sectors.

Furnace Oil Sales Nearly Triple

Meanwhile, industries are buying additional furnace oil to maintain production amid the gas shortage. As a result, both demand for and sales of furnace oil have increased sharply. During the first five days of September, average daily sales stood at 6,380 tonnes. During the same period last year, the figure was 2,177 tonnes.

This means sales have increased nearly threefold. The BPDB initially estimated its furnace oil requirement for September at 84,000 tonnes. Later, following the government’s decision to increase electricity generation from oil-fired plants, the demand rose to more than 200,000 tonnes.

BPC officials said that if it is not possible to supply such a large quantity of furnace oil at once, it will be supplied in phases. Several vessels carrying furnace oil are already on their way, and an initiative has also been taken to bring another vessel. The BPC has informed the BPDB that it should be possible to arrange an amount of oil close to the BPDB’s demand within this month.

However, the entire quantity of furnace oil will not be needed at once. The power plants can continue operating if the oil is supplied in phases. 65 Furnace Oil-Fired Plants in the Country Bangladesh has 65 furnace oil-fired power plants, with a combined generation capacity of more than 6,000 megawatts.

At the end of August, these plants were generating around 3,500 megawatts at night and 1,500 to 2,000 megawatts during the day. Due to the gas shortage, a large number of gas-based power plants could not be operated at full capacity. The country’s electricity situation was even worse toward the end of August. On August 27, production at 62 of the country’s 137 power plants was disrupted. Of them, 20 were completely shut down.

The highest load shedding that day was 3,664 megawatts. At the same time, 24 power plants faced reduced fuel oil supplies. The BPDB’s calculation of 204,100 tonnes applies only to power plants that will receive oil through the BPC. The demand of private plants that import furnace oil on their own is not included in this figure.

LNG Supply May Increase

Meanwhile, Petrobangla has said that gas supply from the Maheshkhali terminals may increase this week. Four more LNG cargoes are scheduled to arrive between September 10 and 18. If all four cargoes arrive on schedule, the two terminals in Maheshkhali will be able to supply up to 1,100 million cubic feet of gas.

Officials of the Rupantarita Prakritik Gas Company Limited said two LNG cargoes arrived consecutively on September 2 and 4, but gas supply was kept limited to around 700 million cubic feet. However, once the next four cargoes arrive, the full available gas supply capacity can be utilised.

According to the previously announced schedule, another cargo from Saudi Aramco is expected to arrive on September 10. After that, cargoes are scheduled to arrive from POSCO on September 13, Gunvor on September 16, Aramco on September 18, Total on September 23, and Gunvor again on September 28. The government has also decided to bring two more LNG cargoes this month, although their schedules have not yet been finalised.

In addition to those two cargoes, the government’s Cabinet Committee on Government Purchase has approved the purchase of four more LNG cargoes.
Of the four cargoes, one will be purchased from BP Singapore Pte Ltd, two from Aramco Trading Singapore, and another from Vitol Asia. Petrobangla also invited a tender last week to purchase another LNG cargo. The LNG will be purchased from the spot market. Combining LNG with gas produced from domestic gas fields, the country is currently receiving 2,333.5 million cubic feet of gas for supply.