Bangladesh's LNG Storage Deficit Costs Heavily Amid Global Price Fluctuations

Bangladesh is paying dearly for its lack of LNG storage facilities. The country's reliance on imported liquefied natural gas (LNG) has resulted in significant penalties and demurrage to global suppliers, especially during monsoon seasons when vessels are stranded due to rough weather.

Petrobangla, the state-owned energy company, has had to pay hefty fines, including a recent $5 million demurrage to TotalEnergies Gas & Power Ltd after their LNG cargo was unable to unload at Excelerate Energy's floating storage and regasification unit (FSRU) due to technical issues.

Experts point out that having an LNG storage facility would mitigate such crises, allowing the country to store fuel from vessels and buy it at lower prices during market fluctuations. Currently, Bangladesh imports over 7 million tonnes of LNG per year without any storage capacity, relying on FSRUs which can be non-operational due to accidents or technical faults.

Energy expert Professor M Tamim suggests that the government should establish a land-based LNG terminal with storage facilities to meet the country's growing energy demands. The government has recently floated tenders for six more spot LNG cargos, seeking to purchase them at a deferred date to mitigate potential disruptions in supply.