LNG: European thirst for natural gas puts Bangladesh in dark

[Black_cats]

LNG: European thirst for natural gas puts Bangladesh in dark​

Last week, Bangladesh suffered its worst blackouts in almost a decade, with more than 100 million people left without power for several hours

Representational image Reuters
Deutsche Welle
October 11, 2022 12:30 PM

European countries have already bought more liquefied natural gas (LNG) in 2022 than in any year previously. The surge in demand followed Russia’s invasion of Ukraine, with various European governments rushing to end their dependence on Russian energy as quickly as possible.

In the nine months from January to September, European nations’ demand for LNG rose dramatically, according to data provided to DW by the analytics group Independent Commodity Intelligence Services (ICIS). Demand in France rose by 88% compared with the same period in 2021, the Netherlands by 109% and Belgium by 157%.

However, Europe’s thirst for LNG is negatively affecting countries in other parts of the world that already import the super-chilled fuel in large volumes. Prices are soaring, and less LNG is up for grabs on the market, making it a much less viable option for poorer countries.

“The way in which Europe has been able to source these volumes is by paying more than other markets are willing to pay for,” Alex Munton, an LNG analyst with energy research group Rapidan, told DW.

The ICIS figures confirm the extent to which LNG demand has fallen in countries outside of Europe, particularly in Asia. In Bangladesh, demand is down 10% compared with 2021; in Pakistan, it’s down 19%, while in China, there is a 22% drop.

Blackouts hit hard

The consequences for certain countries are stark. Last week, Bangladesh suffered its worst blackouts in almost a decade, with more than 100 million people left without power for several hours. For months, Dhaka has been struggling to secure enough gas on global markets.

Mohammad Tamim from Brac University says the blackouts in Bangladesh are connected to energy shortages, although a more significant reason is that the national electricity grid needs to be updated.

“Mostly, it’s a system operating challenge,” he told DW. “The independent system operation has not been updated, and we need a smart grid because larger power plants are coming in.”

Nonetheless, he said countries such as Bangladesh, Pakistan and India have been significantly affected by the changes to the LNG market in 2022.

“Europe is trying to grab every molecule of gas wherever it is available,” he said. “They are purchasing everything from current to future gas. And their purchasing power is much higher than that of developing countries. So obviously, countries like Bangladesh, India, and Pakistan have been hit very hard.”

Pakistan is in the midst of a severe energy crisis, and last week it emerged that it had failed to attract a single bid from suppliers for a tender to supply one LNG cargo per month for between four and six years. For months, Pakistan has also struggled to buy LNG in shorter-term markets.

LNG: European thirst for natural gas puts Bangladesh in dark

Last week, Bangladesh suffered its worst blackouts in almost a decade, with more than 100 million people left without power for several hours

www.dhakatribune.com

 

[hembo]

Doesn't BD have huge gas reserves?

Gas Reserves in Bangladesh​

See also: List of countries by Gas Reserves

Bangladesh holds 7.25 trillion cubic feet (Tcf) of proven gas reserves as of 2017, ranking 42nd in the world and accounting for about 0.105% of the world's total natural gas reserves of 6,923 Tcf.

Bangladesh has proven reserves equivalent to 7.0 times its annual consumption. This means it has about 7 years of gas left (at current consumption levels and excluding unproven reserves).

 

[bluesky]

Doesn't BD have huge gas reserves?

India's favorite Hasina Bibi for the last two decades had not shown interest to extract local gas mostly because the foreign companies who would invest/ gamble hundreds of millions of dollars to discover and then extract oil and gas could not be persuaded to oil the palms (read Bakshish) of BAL's top people (read Hasina Bibi and Rehana Bibi).

 

[hembo]

India's favorite Hasina Bibi for the last two decades had not shown interest to extract local gas mostly because the foreign companies who would invest/ gamble hundreds of millions of dollars to discover and then extract oil and gas could not be persuaded to oil the palms (read Bakshish) of BAL's top people (read Hasina Bibi and Rehana Bibi).

Okie Dokie!! With 7 years reserves this response. Had it been 20+ years of reserves, one could only imagine..

 

[bluesky]

Pakistan is in the midst of a severe energy crisis, and last week it emerged that it had failed to attract a single bid from suppliers for a tender to supply one LNG cargo per month for between four and six years. For months, Pakistan has also struggled to buy LNG in shorter-term markets.

When you spit in the sky, it comes down right on your face.

It was Pakistan that opposed pipelines running from Uzbekistan to cover Pakistan, India, and Bangladesh. What a mindset I don't know, but Pakistan did not agree because the Kashmir issue remained unresolved.

Now, Pakistan itself is suffering from an acute shortage of gas and fuel when its economic situation is getting bad to worse. It is the same with Bangladesh.

India is in a little better position. India has its own oil and its private company Reliance has discovered a huge quantity of natural gas in the western BoB.

India will now certainly expedite the extraction of the BoB gas. Only Pakistan and Bangladesh will be suffering. I personally want Pakistan to behave more like an adult so that commercial issues are separated from bilateral issues.

This is what China is doing with India.

 

[GreatHanWarrior]

When you spit in the sky, it comes down right on your face.

It was Pakistan that opposed pipelines running from Uzbekistan to cover Pakistan, India, and Bangladesh. What a mindset I don't know, but Pakistan did not agree because the Kashmir issue remained unresolved.

Now, Pakistan itself is suffering from an acute shortage of gas and fuel when its economic situation is getting bad to worse. It is the same with Bangladesh.

India is in a little better position. India has its own oil and its private company Reliance has discovered a huge quantity of natural gas in the western BoB.

India will now certainly expedite the extraction of the BoB gas. Only Pakistan and Bangladesh will be suffering. I personally want Pakistan to behave more like an adult so that commercial issues are separated from bilateral issues.

This is what China is doing with India.

I remember China buying Russian gas at low prices. then sell it to Europe at a high price. why doesn't India buy Russian gas and sell it to Europe? Because India doesn't have LNG ships?

 

[Indos]

I remember China buying Russian gas at low prices. then sell it to Europe at a high price. why doesn't India buy Russian gas and sell it to Europe? Because India doesn't have LNG ships?

China gets natural gas from Russia through pipe line, while LNG is a product of making natural gas into liquid one so it can be transported through ships. Russia doesnt have big capacity to do that, mostly they sell natural gas through pipe line into Europe and China where they have land border with them. India cannot get Russia natural gas since there is no gas pipe line between Russia and India.

Natural Gas is cheaper than LNG, so of course China sell Russia gas to Europe will be much expensive since it is in the form of LNG. China has huge LNG plant and transporting LNG from China into Europe needs transportation cost in the form of LNG tankers that is not as efficient as pipe line and China into Europe is not short in distance.

 

[Indos]

Any way China sell LNG to Europe I believe through spot market which much expensive than long term LNG contract as long term LNG contract is usually tied into oil price fluctuation, spot LNG market is way higher in term of price than long term LNG contract due to the implication of Ukraine war as it has been explained by the above article

 

[GreatHanWarrior]

China gets natural gas from Russia through pipe line, while LNG is a product of making natural gas into liquid one so it can be transported through ships. Russia doesnt have big capacity to do that, mostly they sell natural gas through pipe line into Europe and China where they have land border with them. India cannot get Russia natural gas since there is no gas pipe line between Russia and India.

Natural Gas is cheaper than LNG, so of course China sell Russia gas to Europe will be much expensive since it is in the form of LNG. China has huge LNG plant and transporting LNG from China into Europe needs transportation cost in the form of LNG tankers that is not as efficient as pipe line and China into Europe is not short in distance.

But I have heard that China also resells US gas to Europe at high prices. and I heard that China has to urgently increase the production of LNG ships in order to deliver natural gas to Europe more quickly. look. just to help Europe solve the gas crisis. China works so hard.

Why doesn't India buy US gas and sell it to Europe?

 

[Indos]

But I have heard that China also resells US gas to Europe at high prices. and I heard that China has to urgently increase the production of LNG ships in order to deliver natural gas to Europe more quickly. look. just to help Europe solve the gas crisis. China works so hard.

Why doesn't India buy US gas and sell it to Europe?

Yup, maybe because China is also buying US LNG and it is likely long term contract so the price is not as expensive as current LNG spot market, and since China economy is going down due to Covid 19 lock down implementation, so many industry shut down and the unsold gas and LNG is being resold to other country who needed it through spot market. As we know there is no obligation to supply those costumer for long term in LNG spot market, so China can once again use the gas into its own domestic industry once the economy grows faster.

You dont need to always rely on your own tankers to do some trading in LNG and oil commodities. This example China uses Indonesian SOE company tankers, PT Pertamina, to ship Russian oil into China. PT Pertamina has around 450 tankers

This was a news after Greenpeace blown up to the media during early Ukraine war

 

[GreatHanWarrior]

Yup, maybe because China is also buying US LNG and it is likely long term contract so the price is not as expensive as current LNG spot market, and since China economy is going down due to Covid 19 lock down implementation, so many industry shut down and the unsold gas and LNG is being resold to other country who needed it through spot market. As we know there is no obligation to supply those costumer for long term in LNG spot market, so China can once again use the gas into its own domestic industry once the economy grows faster.

You dont need to always rely on your own tankers to do some trading in LNG and oil commodities. This example China uses Indonesian SOE company tankers, PT Pertamina, to ship Russian oil into China. PT Pertamina has around 450 tankers

This was a news after Greenpeace blown up to the media during early Ukraine war

hahahahahaha. For the first time I know. Sometimes China even needs to use Indonesian ships.

 

[Indos]

Okie Dokie!! With 7 years reserves this response. Had it been 20+ years of reserves, one could only imagine..

7 years gas reserve doesn meant it can provide all of current BD needs. 7 years reserve means that current gas production will only be able to supply gas for the next 7 years. It also doesnt mean after 7 years there will be no gas left, if new investment keep being done, the gas supply can be extended or even the reserve may get bigger if new gas field with significant reserve is found.

 

[bluesky]

7 years gas reserve doesn meant it can provide all of current BD needs. 7 years reserve means that current gas production will only be able to supply gas for the next 7 years. It also doesnt mean after 7 years there will be no gas left, if new investment keep being done, the gas supply can be extended or even the reserve may get bigger if new gas field with significant reserve is found.

BD Gas quantity is insufficient. So, it was importing LNG from Qatar. But, now the LNG price is high and the supply has stopped.

 

[CrazyZ]

I read somewhere EU and other wealthy countries have locked up all LNG cargos until 2026. Nothing left for smaller economies....they can only get the out the thick blankets and candles.

 

[CrazyZ]

It was Pakistan that opposed pipelines running from Uzbekistan to cover Pakistan, India, and Bangladesh. What a mindset I don't know, but Pakistan did not agree because the Kashmir issue remained unresolved.

That's inaccurate. India backed out of Iran pipeline. USA, old Kabul regime and India resisted completion of TAPI. India did not want pipelines that went through Afghanistan and Pakistan because of its own insecurities.

In the near term Pakistan will focus on its vast untapped brown coal reserves and hydro power. Gas Pipeline with Iran will be finished soon. Turkmenistan is pushing hard for completion of TAPI. If India does not want to participate....does not matter. LNG plants in Pakistan can get Turkmen or Russian gas to Bangladesh and other Asian countries.