Bangladesh and fossil gas
Bangladesh has seen steady GDP growth of 6-8% per year since 2010. As a result, Bangladesh has seen rapid energy growth with primary energy consumption rising faster than GDP. Bangladesh's fast growing economy is shifting from agriculture to manufacturing and services, with energy security a main government concern.
Natural gas shortages have occurred since 2015, due to stalled domestic production and rising demand, forcing the government to restrict gas supply to fertilizer production, businesses, households, and industrial units and instead giving priority to power plants. 
Demand for electricity is projected to reach 40,000 MW by 2030. Electrical generation capacity has increased from 5 GW in 2009 to 21 GW in 2019, but large gaps remain in reliability and quality of electricity.
U.S. companies play a large role in the power industry in Bangladesh. U.S. companies supply 55% of Bangladesh's domestic natural gas production and are the largest investors in power projects.
Petrobangla is the state-owned oil, gas, and mineral resources company and reports to the Energy and Mineral Resources Division.
Natural Gas Demand
While gas consumption has increased from 19.3 bcm in 2010 to 34.4 bcm in 2019, gas production has not kept pace, with production in 2010 at 19.3 bcm and 28.7 bcm in 2019.
As of 2020, more than half of Bangladesh's natural gas demand comes from the power sector, according to the International Energy Agency.
The total power consumption of Bangladesh increased by a factor of four from 2001 to 2016, from 11,409 GWh to 45,299 GWh. This electricity consumption is dominated by the domestic residential sector.
Key Demand Drivers
Natural gas has over 80% share in the power sector as of 2016.
In the industrial sector, natural gas has almost a 50% share. The industrial sector is dominated by feedstock for fertilizer. However, it is important to note that gas consumption from the fertilizer sector has been limited due to the government rationing gas usage due to supply shortages.
Historically, textile exports have also been a key driver for Bangladesh's economic growth, and therefore a key driver in gas consumption. ICIS projects LNG imports will allow for a double digit growth in the industry and fertilizer sectors.
The fertilizer, textile and leather sectors are expected to account for almost 30 per cent of the total natural gas demand by 2024.
In the residential sector, natural gas is used for cooking and water heating.
In the transportation sector, Natural Gas Vehicles (NGVs) make up 11% of the total vehicles as of 2017.
Projection of Demand Growth
Bangladesh Gas Sector Master Plan (GSMP) 2017
In 2018, Ramboll released a gas sector master plan that concluded there was a large unmet demand for natural gas in Bangladesh. Under all three scenarios examined, there was a need to import gas. The main analysis in the report used Scenario C, a climate change scenario in which renewable energy supplements the use of gas.
There is a wide range in scenarios for both demand and supply projections. Based on the 2017 Gas Sector Master Plan, demand in 2040 could range from 76 - 104 bcm.
Gas demand from the power sector is projected to fall in all three cases, from 48% of total gas demand in 2016/17 to 36% of total gas demand forecasted in 2041 in Scenario C.
2020 Emerging Asia LNG Demand, Oxford Institute for Energy Studies (OIES) Report
A 2020 OIES report is much less optimistic on natural gas demand and forecasts demand at the lower end of the GSMP demand range, around 47 bcm by 2040.
Revised Master Power Plan
In April 2020, the IMF predicted that GDP growth in Bangladesh could fall to 2% in 2020 compared to a pre-Covid forecast of 7.4%. This significant drop means that power demand will be lower and capacity payments will increase unless long-term plans for new capacity are revised. According to the Institute for Energy Economics and Financial Analysis (IEEFA), Bangladesh will have power capacity to generate 58% more power than needed by 2029-2030 if it proceeds with plans to add excessive coal and LNG-fired power plants. In the fall of 2020, the government indicated that they will revise their Power System Master Plan to increase the share of natural gas and imported LNG and reduce the use of coal. The revised Master Plan is set to be released in 2021.
In August 2020, a group of 50 organizations across the world demanded in a letter that the Bangladesh government not consider Tokyo Electric Power Company (TEPCO) as the consultant for the new review of the PSMP due to a conflict of interest.
While there is a push for adding renewable energy to the mix, the lack of available land in Bangladesh poses a problem to renewable development.
Natural Gas Supply
As of 2019, Bangladesh had 4.3 trillion cubic feet of gas reserves. Total gas production in Bangladesh as of 2019, was 28.7 bcm.
Starting in 2018, Bangladesh started importing LNG to meet its natural gas demands and has been one of the fastest growing markets for LNG imports. The transition to importing LNG is appealing since Bangladesh has a history of using natural gas and the onshore gas infrastructure is already in place.
As of 2020, all current producing gas fields have reached their production plateau and at the current consumption rate, the reserves could be depleted by 2039 or earlier.
As of 2020, Bangladesh has two FSRUs with a total LNG supply capacity of 1,000 mmcfd.
Potential New Gas Fields
There may be sizable reserves of gas in the offshore blocks in the Bay of Bengal. There are 26 offshore blocks in the Bay of Bengal, including 11 shallow blocks and 15 deep sea blocks. In March 2020, Petrobangla awarded a US-Norway joint venture TGS-NOPEC and Sclumberger a contract to conduct a 2D non-exclusive, multi-client seismic survey in the 26 blocks over two years. In 2019, the Government of Bangladesh amended the terms of the Model Production Sharing Contract (PSC) to reintroduce a provision, which will attract international bidding interest, to allow offshore drilling companies to export any gas Petrobangla refuses to buy.
Exploration activities have so far been in the eastern part of Bangladesh and the shallow coastal water in the south east of Bangladesh. The western onshore area as well as the deep-water region remain unexplored.
While domestic gas production from existing discoveries have stalled, there is large potential, up to 34 trillion cubic feet, for domestic production if further explorations are successful.
Current Gas Supply Projects
In February 2020, state-run Gas Transmission Company Ltd (GTCL) completed the 181 km Chittagong-Feni-Bakhrabad Gas Transmission Parallel Pipeline Project. The completion of this pipeline ensures full usage of country's FSRUs and will boost LNG imports over the long term.
The Excelerate Excellence FSRU, Bangladesh's first LNG import terminal, opened in 2018 with a capacity of 3.8 mtpa. A second LNG terminal, Moheshkhali LNG Terminal, began its operation in April 2019.
Proposed Gas Supply Projects
To meet the domestic gas demand, in 2018 Bangladesh started importing LNG under long-term deals from Qatar's RasGas, as well as Oman's Oman Trading International.
A proposed LNG terminal, Matarbari LNG Terminal, with a capacity of 7.5 mtpa is currently under planning at Matarbari in Maheshkhali of Cox’s Bazar. In 2019, the government solicited bids to build the facility under a build-own-operate transfer basis. However, as of fall 2020, delays in hiring a consultant has pushed back the selection of a bidder.
It is interesting to note that due to the geography of Bangladesh, the options for importing LNG are limited to the southeastern part of the country. New investments in the gas transmission system would be required to bring gas from the south to the north.
In late 2020, Bangladesh cancelled a tender to import LNG from the spot market for November due to too high of spot prices. In September 2020, in an effort to diversify LNG sourcing beyond long-term contracts and take advantage of low prices, Bangladesh began LNG imports from the spot market. An IEEFA report released in January 2021 indicates that increased LNG price volatility will place 42 GW of proposed LNG power projects in Vietnam, Bangladesh, and Pakistan at risk.
In August 2020, the Ministry of Power, Energy, and Mineral Resources asked for the prime minister's approval to convert 13 large coal power projects into LNG based plants. These coal projects have a total capacity of 13,000 MW and have made little forward progress or could not secure financing. 
Table 1: Proposed LNG Import Terminals in Bangladesh
|Project Name||Location||Capacity||Expected Commencement Date||Sponsor||Project Status||Main Users|
|Matarbari LNG Terminal||Matarbari, Cox's Bazar||7.5 mtpa||TBD||PetroBangla||Proposed|
|Payra LNG FSRU Terminal||Payra, Barisal Division||TBD||TBD||NWPGCL||Feasibility study conducted||Payra CC Power Plant|
Table 2: Proposed Gas Power Plants in Bangladesh
|Project Name||Location||Capacity||Expected Start||Sponsor||Project Details/Status|
|Rupsha Combined Cycle Power Plant||Khalishpur||800 MW||2022||North-West Power Generation Company||Will receive gas from Khulna City Gas Station|
|LNG-based Combined Cycle Power Plant||Moheshkhali||3600 MW||TBA||Bangladesh Power Development Board, General Electric||MoU signed in October 2019|
|Payra Combined Cycle Power Plant||Barisal Division||3600 MW||Unit 1: 2024
Unit 2: 2026
Unit 3: 2028
|Siemens||Three units of 1200 MW each.|
|Meghnaghat-II Power Station||Meghnaghat||590 MW||2022||Summit Power||22-year PPA signed in March 2019|
|Reliance Meghaghat CC Power Project||Narayanganj||745 MW||2022||Reliance Group, JERA||PetroBangla to supply regasified LNG.|
|Khulna Khalishpur-2 Power Station||Khulna||330 MW||2022||Bangladesh Power Dev Board||Project delays announced Fall 2020|
|Matarbari RLNG Power Station||Maheshkhali Upazila - Cox's Bazar District||600 MW||2023||CPGCBL/Mitsui Joint Venture|
|Pertamina Bangladesh Power Station||Anwara Upazila - Chittagong Division||1400 MW||2023||Pertamina Bangladesh|
|Matarbari Summit Power Station||Maheshkhali Upazila - Cox's Bazar District||2400 MW||2023||Summit (55%), Mitsubishi (25%), GE (25%) Joint Venture|
|UPGD Anwara Power Station||Anwara Upazila - Chittagong District||590 MW||TBD||United Enterprises & Co Ltd, Kyushu Electric Power Co Inc, Sojitz Corporation|
|Ashuganj East Power Station||Ashuganj - Brahmanbaria District||400 MW||2021||Ashuganj Power Station Co Ltd.||Under construction|
|Bibiyana South Power Station||Parkul - Habiganj District||400 MW||2021||Bangladesh Power Dev Board||Under construction|
|Unique Meghnaghat Power Station||Meghnaghat - Narayanganj District||584 MW||July 2022||Unique Meghnaghat Power Ltd.||22 year PPA signed; Under construction|
|Ghorasal CC Power Plant||Palash||225 MW||2025||Bangladesh Power Dev. Board|
|Shiddirgonj CC Power Plant||600 MW||2025||Bangladesh Power Dev. Board|
|Meghnaghat CC Power Plant||Meghnaghat - Narayanganj District||500 MW||2023||Bangladesh Power Development Board|
|Haripur CC Power Plant||Haripur||250 MW||2023||TBD|
|Raozan CC Power Plant||Raozan, Chattogram||400 MW||2022||Bangladesh Power Development Board|
|Mymenshingh Dual Fuel CC Power Plant||Mymensingh||420 MW||2023||RPCL||Will meet electricity demand until 2025 in six districts of Mymensingh area|
|Bhola Dual Fuel CC Power Plant||Bhola||220 MW||2020||Shapoorji Pallonji Group||Under development|
Table 3: Proposed Gas Pipeline Projects in Bangladesh
|Project Name||Capacity||Owner||Expected Start||Length (km)||Diameter (inches)|
|2nd Bangabandhu Railway Bridge Gas Transmission Pipeline||PetroBangla||2023||12 km||36 in.|
|Bhomra-Khulna Transmission Pipeline||PetroBangla||2022||65 km||30 in.|
|Langalbandh-Mawa-Gopalganj-Khulna Transmission Pipeline||1.2 bcm/yr||PetroBangla||2021||175 km||30 in.|
|India-Myanmar-Bangladesh Gas Pipeline||Gas Authority of India Limited (GAIL); Oil and Natural Gas Corporation (ONGC); Bangladesh Petroleum||TBD||7000 km|
|Chittagong-Feni-Bakhrabad Gas Transmission Pipeline||PetroBangla||2020||181 km||36 in.|
|Dhanua-Elenga and Bangabandhu Bridge-Nalka Gas Transmission Pipeline||PetroBangla||2021||67 km||30 in.|
|Moheshkhali-Anwara Parallel Pipeline||PetroBangla||2021||79 km||42 in.|
|Bogura-Rangpur-Saidpur Gas Transmission Pipeline Project||3.6 - 4.1 bcm/yr||PetroBangla||2021||150 km||30 in.|
Projection of Gas Production
The 2017 Gas Sector Master Plan presents a wide range for future domestic gas production, largely dependent on if yet to find reserves are developed.
S&P Global Platts Analytics expects the country's total gas imports to grow an additional 3 bcm in 2020, and imports are expected to reach nearly 9 bcm by 2022. The Bangladesh government intends to be able to import 35 mtpa by 2030.
The extent of LNG imports required will also depend on production levels. Based on the 2017 Gas Sector Master Plan, production could be close to zero or at a similar level to 2018 depending on yet to be found reserves.
A 2020 Oxford Institute for Energy Studies report shows gas production slowly declining in the long run, leveling off around 25 bcm by 2030 and LNG imports reaching 15 bcm by 2030.
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