Gas Sector Development Initiative Yet To Get Pace

Eight months have whistled by since the interim government assumed office. No great news is available regarding exploring additional gas resources or infrastructure development to facilitate additional LNG imports.

- Saleque Sufi

The gas deficit keeps widening. Gas supply shortage continues affecting gas-based power generation, industries, and other end users. BAPEX/Petrobangla could not intensify its exploration campaign for achieving its target of a 50-well drilling program by June 2026 and a 100-well drilling program by 2028. PSC bidding for offshore exploration fell flat. It is highly unlikely that even a fresh initiative will change the situation, as investors may not risk investing in an uncertain political regime. The interim government lost a trick in quickly cancelling the signed agreement with Summit Energy for the installation of 3rd FSRU and cancelling the LOls to several companies for setting up grid-connected solar power plants. Petrobangla sources inform that the “coincident peak demand” of gas now is 4,200 MMCFD. But including 1,000 MMCFD imported LNG, the total supply capacity is about 2,700 MMCFD. The domestic production continues to decline. The present capacity is 1,842 MMCFD and is progressively declining. The Bibiyana gas field alone is supplying 950 MMCFD. The production plateau has been reached. In 2025 and 2026, production may deplete alarmingly. The present exploration program, with limited success, may not significantly replenish. Any new LNG import infrastructure cannot start operation before 2029. The government is talking about land-based LNG terminals. Even if the contract for LBT is signed by the end of 2025, there is no chance for it to get into commercial operation before 2030. What will then happen with gas supply security? A few hundred smalland medium-sized industries have already closed their operations. Even large industries are growing sick. Despite failures in ensuring a quality gas supply on an uninterrupted basis, gas prices for new industries and captive power generation have entered a new round of price increases through a BERC determination. The business community considers this a major blow not only for new investments but also for the expans