Bangladesh Gas Crisis Exposes LNG Supply Chain Weakness
Bangladesh is facing a severe gas crisis due to logistics weaknesses and concentration risks in its supply chain, according to a recent report. The country's total gas availability stands at around 2,420 million cubic feet per day (MMcfd) as of mid-August, which is short of the national demand of about 3,800 MMcfd.
The shortage has affected various sectors, including factories, filling stations, households, and power plants. The supply disruption is attributed to a failure in the country's liquefied natural gas (LNG) import chain rather than a single procurement issue.
According to the report, Excelerate Energy's Floating Storage and Regasification Unit (FSRU) went offline due to a fire and technical problems, leading to unloading delays at a terminal. As a result, inventories were exhausted, and supplies were interrupted.
The report highlights that Bangladesh imports LNG through two FSRUs located off Moheshkhali Island, which supply an estimated 30-37% of national gas needs. The country's reliance on these two units creates a single-point vulnerability, making it susceptible to technical failures, marine accidents, or shipping delays.
The report also notes that domestic production continues to decline, and replacement with imported LNG exposes the economy to international prices, foreign exchange requirements, and maritime disruption.