The import cost of per unit liquefied natural gas (LNG) for the current fiscal year would be about 24 times higher than the local company production, according to the Centre for Policy Dialogue (CPD).
The think-tank said this today in a virtual dialogue styled “Gas-LNG Debate in Energy Supply: Costs and Consequences of LNG Import for the Power Sector”.
CPD Research Director Khondaker Golam Moazzem and Senior Research Associate Abdullah Fahad presented a keynote speech at the event.
The CPD said greater dependency on imported LNG is acknowledged to meet the demand-supply gap of the natural gas requirements in the country.
In terms of price surge, LNG is found to be one of the unpredictable energy commodities, and suppliers of the long-term contracts are not showing interest in stable contractual obligations, as media reports claimed, it said.
According to a study of the CPD, the increasing price trend of LNG in global markets is not likely to change and regional gas prices have already started to converge, thus making LNG export less profitable.
In the fiscal year 2020-21, the economic cost of LNG was Tk 31.56 per cubic meter whereas the power plants only paid Tk 4.45 per meter cube.
The CPD said it is time to revisit the country’s existing approach on the growing reliance on LNG imports for power generation and the associated infrastructure development plans.
For example, establishing new LNG-based power plants (11 plants with 6,468 MW capacity in the pipeline) does not seem logical.
In the short term, LNG imports may need to continue to meet the existing demand-supply gap particularly for activities or sectors that were no immediate alternative. These may include household, industry, hotel restaurant, transports etc, the CPD said.
In the medium to long term, Bangladesh needs to consider alternates of LNG import in the above-mentioned sector targeting more cleaner sources of energy use. These may include industry and transport.
In short, medium to long term, Bangladesh needs to emphasize gas supply from domestic gas reserves, the CPD suggests.