Tk 32,000 cr spent for LNG import in 2023

Mahfuja Mukul: There are three government companies engaged in local gas extraction in the country. In the financial year 2022-23, the companies have supplied a total of 841.2 crore cubic meters of gas. Tk 1,735 crore was obtained by selling this gas. On the other hand, Tk 574.52 crore cubic meters of imported LNG was supplied in the last financial year. According to this, in the last financial year, LNG imports were equal to 68 percent of the total supply of local government gas extraction companies.
Petrobangla has not released the final information regarding the calculation of the cost of this LNG import yet.
However, speaking to some officials of the finance and operations department of the organization, it is known that more than Tk 32 thousand crore were spent on LNG import in the country in the last financial year. Accordingly, the cost of LNG in the last financial year was more than 18 times the sale price of extracted gas by local government companies. Experts have objections about the contribution of LNG to the country’s gas sector and the disparity in its expenditure. According to them, the financial health of the country’s energy sector has been threatened by importing high-priced LNG from an unstable market. The financial pressure and liabilities of Petrobangla are increasing gradually, especially while buying LNG from the spot market.
According to the data of Petrobangla, the country’s three local gas companies are currently extracting 109 million cubic feet of gas daily. Companies get Tk 10 per thousand cubic feet of gas. And gas is available at $2 per thousand cubic feet from foreign extraction companies (IOCs). The normal supply of LNG to the national grid is 75 to 80 cubic feet. Now the supply is 59.7 million cubic feet. Petrobangla spent between $25-35 per mmbtu (thousand cubic feet) to purchase LNG last fiscal.
Experts believe that dependence on imported LNG in the gas sector is having a negative impact on the overall economy of the country considering the contribution and cost. When asked about this, energy expert Professor Badrul Imam told, “LNG is making a limited contribution to the national grid. But if it is compared with the financial cost of the total gas, it can be seen that a huge amount of money is being spent in bringing this limited amount of gas. To get out of this situation, the import should be brought to the minimum level. Along with this, the supply of extracted gas should be increased at the local level. In addition to saving foreign currency economically, the risks of the gas sector companies will also be reduced.
According to Petrobangla’s calculations, the share of the three government companies in the total gas production within the country is 37 percent. In the last fiscal year 2022-23, the total amount of gas sold by the three companies was 841.20 crore cubic meters, which was worth Tk 1,735 crore. Bangladesh Gas Fields Company Limited (BGFCL) has sold the most gas among them. The amount of gas extracted by the company was 617.43 crore cubic meters last financial year. The sale price was Tk 1,062 crores. 27 percent of the total gas extraction came from BGFCL’s gas fields.
Sylhet Gas Fields Limited (SGFL) is lagging behind in gas extraction despite having huge reserves. The company sold gas worth Tk 152 crore in the last financial year. The amount of gas sold was 90.77 million cubic meters. In addition, the state-owned oil and gas exploration and extraction company Bapex has sold 133 million cubic meters of gas during this time. The company has sold gas worth Tk 521 crore.
The contribution of locally raised gas to the national grid is about 75 percent. The remaining 25 percent is met through LNG imports. LNG is being imported from 2018 to reduce local gas supply. In the beginning, the product was available at a low price, but in 2022, the international market for LNG became highly unstable. Because of this, the cost of Petrobangla suddenly increased. In the last five financial years, the company had to spend more than Tk 120 thousand crore while importing LNG. At present, initiatives have been taken to increase the import of LNG. Last June, the energy department signed two long-term agreements with Qatar and Oman. Besides, LNG is being imported from the spot market.
According to the information of Converted Natural Gas Company Limited (RPGCL), a total of 574.52 crore cubic meters of LNG has been supplied to the national grid in the financial year 2022-23. Energy Department purchases LNG in the country. And Petrobangla estimates and calculates the cost of LNG import for the Energy Department. The company is yet to release its 2023 annual report.
On the condition of anonymity, two officials of Petrobangla told that during the last financial year, Petrobangla had to spend a huge amount of money to bring LNG cargo.
They said that the amount of this expenditure is not less than Rs.
According to the financial report of Petrobangla, in the financial year 2018-19, including regasification charges, the company spent Tk 11,812.52 crores on LNG import. After that, Petrobangla imported 66 cargoes of LNG in the fiscal year 2019-20. For this, the organization has to pay Tk 17,502.62 crore. Against the import of 72 cargoes under long-term contracts, more than Tk 17,500 crore were spent in the fiscal year 2020-21. And in the financial year 2021-22, Petrobangla’s expenditure on the import of energy products has been estimated at Tk 38,660 crores. Petrobangla has not yet published the final financial report of the last two financial years.
However, in the last financial year (2022-23), the import cost of LNG will not be less than Tk 32 thousand crore, according to related sources.
In addition to increasing financial cost at the beginning of LNG import, Petrobangla’s LNG import volume has almost doubled in the last five fiscal years. In the financial year 2018-19, LNG import volume of Petrobangla was 328.2 crore cubic meters. In the financial year 2019-20 it increased to 574.50 crore cubic meters. In 2020-21, the import was 611.9 million cubic meters and in 2021-22 it was 681 million cubic meters.
On the condition of anonymity, a senior official of Petrobangla’s operations department told, “We need LNG import.” There is no longer a large supply of our demand locally. And if you want to import from abroad, when the price falls, then you have to buy it at that price. We are trying to increase gas supply at local level. It has already increased.
Energy expert and BUET professor M. Tamim told, “We buy gas from local gas company and IOC at a very low price. But the calculation of LNG cannot be matched with that price. Where the impact is, mixing LNG with cheaper gas makes the average price higher. As a result, it affects the tariff. Now to get out of it, investment in gas is needed. If a third party is to be used to extract the amount of local gas reserves being shown, it should do so. Then we can get out of this crisis in the gas sector.