Social unrest curbs Bangladesh's gas and power demand, spot LNG procurement

The ongoing civil unrest in Bangladesh -- that forced factories and commercial establishments to shut sporadically in recent weeks -- has curbed power and natural gas demand, and limited spot LNG procurement by the country's state energy company Petrobangla, according to data and market sources.

While natural gas, power and petroleum consumption has plummeted in Bangladesh since anti-government protests began in early July, LNG traders also voiced concerns about longer term risks in gas supply to the South Asian country.

Bangladesh's power generation dropped to as low as around 11,000 MW when offices and factories were closed, compared to overall generation capacity of 26,500 MW, according to Bangladesh Power Development Board.

Natural gas supply fell to around 2.10 Bcf/d, including 600 MMcf/d of regasified LNG, from around 2.60 Bcf/d after accounting for one of the country's two LNG import terminals offline for repairs.

An industry source based in Bangladesh said that Rupantarita Prakritik Gas Co. Ltd., or RPGCL, was out of the LNG spot market because demand had weakened amid current political tensions and LNG supply from long-term agreements was sufficient to meet demand.

RPGCL, the LNG procurement arm of Petrobangla, has also cut back on LNG tender activity due to the Summit FSRU offline for repairs and expected to be back online on Aug. 8.

The company issued tenders for 23 spot LNG cargoes between January and May for delivery upto June. RPGCL has issued only two tenders for July for delivery in July 15-19 and July 24-25, both of which have been delayed, and no tenders for August have been issued.

Meanwhile, local media reported the resignation of Prime Minister Sheikh Hasina and her departure from Bangladesh on Aug. 5 afternoon along with her younger sister Sheikh Rehana, for a destination in India.

The announcement of Sheikh Hasina's resignation came from Chief of Army Staff Waker-uz-Zaman after protesters stormed her official residence, Dhaka Tribune reported Aug. 5.

Bangladesh has seen waves of protests, curfews and violent crackdown by government forces, impacting economic activity, including its garment sector and textile factories that have been driving electricity and gas demand in recent years.

LNG traders said Bangladesh's spot LNG imports already command a premium due to payment risks and this could increase if the political and social situation does not normalize soon.