Bangladesh transforms into S Asia LNG hotspot
As Bangladesh is set to emerge as a pertinent consumer beside India and Pakistan, South Asia is poised to emerge as a hotspot of liquefied natural gas (LNG).
Only India and Pakistan currently import LNG in South Asia, taking in a combined 25 million tonnes, or 8 per cent of global demand last year.
But with a fast growing population, strong economic growth and soaring energy demand, more import projects are being developed, lead by Bangladesh and India.
Reuters reported in a Dhaka/Singapore joint datelined story on Wednesday that Pakistan only started importing its first LNG in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year.
"Both countries already have extensive gas infrastructure due to legacy production from domestic gas fields," said Chong Zhi Xin, principal Asia LNG analyst at energy consultancy Wood Mackenzie. "As domestic production has failed to keep up with demand, both markets are a natural fit for LNG imports."
Pakistan only started importing its first LNG in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year.
With Bangladesh set to join the club of importers next year, the region could import 80-100 million tonnes a year by the mid 2020s, analysts said, making it the world's second biggest import region, ahead of Europe.
Bangladesh Boom : Bangladesh, a country of over 160 million people, could import as much as 2,500 million cubic feet per day (mmcfd) of LNG, equivalent to around 17.5 million tonnes per year, by 2025, said Nasrul Hamid, Bangladesh's state minister for energy and power.
With its own gas reserves depleting and seeking to almost double power capacity to 24,000 megawatt (MW) by 2021, Bangladesh is tapping cheap and plentiful supplies on world markets and investing heavily in LNG.
Several floating storage and regasification units (FSRU), the first developed by private U.S. company Excelerate Energy, are due to begin importing cargoes starting in 2018. [nL8N1JA5LU]
Both FSRUs will be deployed off Moheshkhali Island in the Bay of Bengal, in the southeast of the country. They will have a combined capacity of 7.5 million tonnes a year.
Two more FSRUs are planned, though no exact dates have been finalised. In addition, state-run Petrobangla signed a preliminary deal with India's Petronet in December to set up an onshore terminal to regasify a further 7.5 million tonnes a year of LNG on Kutubdia Island, just to the north of Moheshkhali, at a cost of $950 million.
"By 2025, depending on our national demand, we will import anywhere from 2,000 to 2,500 mmcfd gas," Hamid said.
Those imports would add to plans from India and Pakistan to buy 50 million and 30 million tonnes of LNG per year, respectively, by the mid-2020s.
"LNG imports in South Asia are expected to rise four-fold from 22 million tonnes per year in 2016 to over 80 million tonnes per year by 2030," said Mangesh Patankar, head of Asia/Pacific business development at energy consultancy Galway Group.