Tk 110,700 cr spent for LNG import in 4 yrs

Mahfuja Mukul: Most of the country’s gas supply comes from local extraction. Although most of the money spent on this is going to LNG sector. Since the beginning of LNG import in the country in 2018, in the last four financial years, the total expenditure of the energy department on gas supply has been slightly more than Tk 110,700 crore. From 2018-19 fiscal year to 2021-22 fiscal year, 77.38 percent of this money was spent on LNG import. Foreign companies (IOCs) that extract gas in the country have to pay 17.35 percent. A little more than 5 percent has been spent on the three domestic companies extracting gas locally.
On the other hand, according to the statistics of daily gas supply in the national grid for the last four financial years, the average daily supply has been 2,700 million to 2,900 million cubic feet. Of this, IOC’s gas supply was 50 percent. Gas supply by local companies was 26 percent. And imported LNG supply has averaged 24 percent.
The energy department is spending huge sums of money importing LNG, which contributes little to supply. The energy sector is at financial risk. And for more than two decades, investment in local gas extraction and exploration was minimal. Experts believe that this issue is largely responsible for the ongoing crisis in gas supply management in the country. If this LNG-dependency is not overcome, they fear that the level of danger may increase in the coming days.
Import of LNG into the country started from 2018. According to an estimate of Petrobangla, from the fiscal year 2018-19 to the fiscal year 2021-22, Tk 85,667 crore have been spent on importing energy products, which is 77.38 percent of the total expenditure on gas supply. Two foreign companies, Chevron and Tallo, are engaged in local gas extraction. These two companies have been given money of Tk 19,208 crores for the supply of gas in the four financial years up to 2021-22, which is 17.35 percent of the money spent.
Besides, there are three local companies engaged in gas extraction – Bangladesh Gas Fields Limited (BGFCL), Sylhet Gas Fields Limited (SGFCL) and Bangladesh Petroleum Exploration and Production Company Limited (BAPEX). These three companies have been paid Tk 5,828 crore for supplying gas to the country in four fiscal years, which is 5.26 percent of the money spent on this.
After the 2021-22 financial year, Petrobangla and related institutions have not yet published any full report of the last financial year. However, in a report published by Petrobangla updating the information up to April of the last financial year (2022-23), the expenditure of the previous financial years has been shown to continue.
According to the information of Petrobangla, about 2,900 million cubic feet of gas was supplied to the national grid last Friday. Among these, the biggest contribution was the IOC. Imported LNG contributes the least.
According to the locally extracted gas data for four fiscal years, IOCs supplied 61 percent of gas in 2018-19, 63 percent in 2019-20, 65 percent in 2020-21 and 63 percent in 2021-22. Among these organizations, the largest provider of locally extracted gas is Chevron, a multinational company in the US energy sector.
From FY 2018-19 to FY 2021-22, 252 LNG cargoes have arrived in the country. Tk 85,667 crores have been spent on importing this amount of cargo LNG. Out of this, Tk 11,812 crore were spent on LNG import in 2018-19 financial year. Besides, about Tk 17,503 crore in 2019-20 financial year, Tk 17,692 crore in 2020-21 financial year and Tk 38,660 crore in 2021-22 financial year have been spent.
According to a senior Petrobangla official involved in LNG import work, the cost of LNG import in the last fiscal year may be slightly less than the previous fiscal years. Because the price of LNG in the spot market has been low for several months, the energy department has been able to buy LNG cargoes at low prices.
Energy experts believe that if there was no import-dependence, so much money would not have been spent to maintain supply in the gas sector in the country. According to them, the energy department has spent huge amounts of money in previous years by leaning heavily on LNG. It is now necessary to get out of this policy.
Energy expert and former member of Bangladesh Energy Regulatory Commission (BERC) Maqbul-e-Ilahi Chowdhury told, ‘After independence, Bangabandhu Sheikh Mujibur Rahman took the initiative to increase investment in the local gas sector. He did this because the energy security of the country is not possible with oil and gas imported from abroad. But we have walked the opposite path of that policy. And in doing so, I spent a huge amount of money buying LNG. If the amount of money that is being spent on imports is invested in the country, it is possible to reduce import-dependence within two years.
No monetary value has been assessed for the gas produced locally in the country. Basically, the cost of locally extracted gas is considered by calculating the operating cost of the local companies. Even if we calculate the gas that is being purchased from foreign companies, it is not possible to fully determine the price of domestic gas. However, experts believe that this price can be calculated better if we consider the price of LNG in the international market.
Energy expert Professor Badrul Imam told, “The gas that is being extracted in the country through local gas companies is only an operational cost. It is not the monetary value of gas. But the gas being extracted through foreign companies also has some monetary value. More gas would have been available in the country with foreign investment. Huge amounts of money by extracting gas at low prices; Dollars in particular could have been saved. But we couldn’t do that. Because there has not been much investment in the energy sector of this country in the last two decades. If investments were made, dependence on LNG could be reduced.