Coal gets the nod as gas runs short
Prime Minister Tarique Rahman has directed the power, energy and mineral resources ministry to prioritise coal-fired power generation to free up more gas for industries, as the government seeks to strengthen energy security and provide a reliable energy base for economic and industrial expansion.
He also instructed the ministry to ensure timely LNG imports within the capacity of the country’s two floating LNG terminals while avoiding the direct procurement method.
The government aims to build an energy supply system capable of supporting Bangladesh’s transformation into a large-scale manufacturing hub by 2029 and ensuring sustainable energy security over the following five years.
The directives came at a meeting on the country’s energy crisis yesterday, where the Energy and Mineral Resources Division presented an assessment of the current
power and energy situation and outlined medium-term plans through 2029 and long-term strategies up to 2035.
Tarique reviewed the demand and supply of gas, fuel oil, coal and furnace oil, as well as electricity demand and generation from different fuel sources.
Speaking to reporters, Prime Minister’s Economic Affairs Adviser Dr Rashed Al Mahmud Titumir said gas supplies to industries were expected to improve by the coming winter, while visible progress in both gas and electricity supplies would be achieved by next summer.
The prime minister also sought a detailed roadmap showing how energy availability would evolve through 2029, allowing investors to plan with greater certainty.
Coal power to release gas
The government plans to reduce the power sector’s dependence on gas by increasing coal-based generation, even if this means somewhat higher power subsidies.
The Energy Division said one mmcfd of gas can generate around 5MW of electricity.
Diverting gas from power generation to industries could therefore help ease the supply shortage in the productive sectors.
The division also expects electricity supplies to improve when the first unit of the Rooppur Nuclear Power Plant comes online in September-October, reducing pressure on gas-fired plants. Greater use of solar power is also being considered.
Gas supply gap remains wide
Bangladesh currently supplies around 2,600-2,750 mmcfd of gas against an approved national load of 5,200 mmcfd.
According to the Energy Division, regular supply of 3,200 mmcfd would allow most sectors to operate more or less normally, while 3,800 mmcfd would eliminate the shortfall.
Of the current supply, around 1,585 mmcfd, or 62 per cent, goes to electricity generation.
Power plants receive about 1,000 mmcfd, while industries and other organisations consume another 585 mmcfd for captive generation.
The remaining 38 per cent is supplied to industries, commercial users, transport and households.
Domestic gas production falls
Domestic gas production has declined significantly since Bangladesh began importing LNG in 2018.
Local gas fields supplied around 2,000-2,100 mmcfd in 2018, but production has since fallen to around 1,600 mmcfd while demand has continued to rise.
The government plans to increase domestic gas supplies by an additional 1,750 mmcfd by 2029 and step up drilling and re-drilling of 150 wells.
It also plans to connect newly discovered gas reserves in Bhola to the national grid. A feasibility study has been completed and the proposed pipeline is estimated to cost Tk500 crore.
The Energy Division said each imported LNG cargo costs around Tk730-750 crore, making the proposed pipeline economically viable.
LNG supplies to be diversified
The government wants to reduce its dependence on Middle Eastern LNG and is negotiating long-term supply agreements with countries outside the region.
Discussions are also under way with two or three additional US companies.
Tarique has stressed the need to ensure LNG imports within the capacity of the country’s two floating storage and regasification units while avoiding direct procurement.
Bangladesh recently failed to receive six LNG cargoes procured through the direct procurement system after suppliers diverted them to other countries offering higher prices.
“Because this creates uncertainty over LNG supplies and also leaves room for corruption,” a government official told TBS.
The government plans to install three additional floating LNG terminals by 2029.
Fuel reserves expanding
The government is building fuel-oil reserves to cover 90 days of demand. If all letters of credit opened for imports through 30 August are delivered on time, stocks will be sufficient for 57 days, compared with only 14 days when the current government took office.
The government’s broader energy strategy combines greater coal-fired and nuclear generation with increased domestic gas exploration, diversified LNG supplies and larger fuel reserves.
It hopes these measures will ease the immediate crisis while creating a more predictable energy system to support industrial growth and Bangladesh’s manufacturing ambitions by 2029.
