Our Correspondent:
THERE is a possibility that the oil and gas crisis will intensify. There is, on one hand, the Russia-Ukraine conflict and oil reserves of major oil-producing countries are, on the other hand, shrinking. The bottom line is that the energy crisis is getting more acute and Bangladesh is falling into this crisis. The installed power generation capacity of Bangladesh, including renewable energy, is about 25,500MW. The maximum production is 14,782MW. Recent reports show that production has already decreased by 3,500MW.
What should we do in this situation? The demand is now more than 3,700 million cubic feet a day, but the supply is about 300 million cubic feet. According to the July 2022 MIS report of Petrobangla, gas supply in 2020 was more than 217 million cubic feet, which decreased to 208 million cubic feet in June 2021. Gas is not supplied keeping to the demand. As economic activity increases, demand for gas increases while production decreases. As a result, the gas shortage is going to become severe soon. The Bangladesh Energy Regulatory Commission says in a report that the extracted reserves may run out in 2025.
According to the report, gas accounts for 65 per cent of the total energy sector. As of June 2021, recoverable gas reserves stood at 11.47 trillion cubic feet, with one trillion cubic feet being extracted annually. If so, the extractable gas reserves will be exhausted in the next 11 years. The commission also says that not even one trillion cubic feet of gas was added to the reserves in the past decade.
In this situation, Bangladesh imports liquefied natural gas to meet the demand. According to Petrobangla, the gas reserves will fall to six trillion cubic feet in 2025 and five trillion cubic feet in 2030, which will make Bangladesh heavily depend on the import of liquefied natural gas and put energy security at risk. The daily gas demand now is 4,000 million cubic feet; 2,500 million cubic feet are supplied by local and foreign companies and and 500 million cubic feet are managed with LNG import.
The supply of gas in 2025 will be 1,300 billion cubic feet and in 2030, the supply will be 650 billion cubic feet. During this time, demand for gas will be about 2,000 billion cubic feet while the supply will be about 1,300 billion cubic feet. The deficit will reach 700 billion cubic feet. In 2030, the demand will be 2,227 billion cubic feet and the supply will be 1,308 billion cubic feet. The deficit will reach 900 billion cubic feet.
It will then be difficult to meet the demand even with LNG import. According to Energy Regulatory Commission sources, in the 2019–20 financial year, liquefied natural gas was imported at 550mmcfd. The annual import expenditure is Tk 11,370 crore. It is also known from the commission’s sources that in 2025, the expenditure will be Tk 27,500 crore and in 2030, Tk 37,466 crore.
In the past two decades, the government continued to ignore gas exploration even though experts repeatedly so advised. According to a 2022 estimates, gas extraction will total 900 billion cubic feet a year. As a result, the stock will be depleted soon. And the reliance on LNG import will grow. This will, as is already evident, put the energy sector at risk.
According to the Power Development Board, we depend on gas for about 45.83 per cent of electricity. Gas demand for captive power is 15.66 per cent. Gas consumption is 13.37 per cent in the domestic sector, 5.49 per cent in fertiliser, 3.64 per cent in the compressed natural gas sector, 0.55 per cent in the commercial sector, 0.11 per cent in tea industries and 15.66 per cent in the small and cottage industry sector. According to Petrobangla’s 2021 monthly MIS report, the total gas production in the 2015–16 financial year was 27,559 million cubic feet, which decreased to 23,917 mllion cubic feet in May 2020–21.
During the period, the production of domestic companies decreased from 11,194 million cubic feet to 7,987 million cubic feet. On the other hand, the production of international oil companies also decreased from 16,648mmcfd to 15,105mmcfd in the period. This means that gas production is decreasing fast. It is said that Petrobangla’s profits are also decreasing along with the reduction in gas production and supply. In 2020–21, the total income of Petrobangla was Tk 10,952 crore. Petrobangla made a net profit of Tk 1,651 in the past financial year by selling gas, coal and other products and Tk 7,917 crore was given to the state exchequer.
Although the government makes profits from gas, it pays a subsidy on LNG import to deal with the crisis. The price of liquefied natural gas on the world market is increasing. In 2020–21, the government decided to import liquefied natural gas worth Tk 17,000 crore, for which the subsidy allocation is estimated to be more than Tk 2,800 crore. And, in the national budget, Tk 1,400 crore is given to Petrobangla for the payment of LNG import. The target for gas supply in the current financial year, including gas production and LNG import, has been set at 3,079 billion cubic feet. The subsidy is Tk 2.21 a cubic metre.
In the previous financial year, Tk 2,500 crore was given in subsidy. What is worrying is that the government has yet to take proper initiatives to deal with the gas crisis. The state-owned Bangladesh Petroleum Exploration and Production Company Ltd is not properly used. Bapex has discovered several fields. And it produces gas from seven out of eight fields. Its daily production is about 3.692 million cubic feet. However, Bapex has several technological limitations. Moreover, the discovered fields are given to foreign companies. The government is not equipping Bapex properly to explore gas onshore and offshore which is what is absolutely needed to achieve energy security.

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