Memorandums, local players, and key imports to restore the demand-supply curve of energy in favor of Bangladesh’s development
Factoring in the role of energy in the development goals of Bangladesh, Prime Minister Sheikh Hasina has signed a memorandum of understanding (MoU) with Dr Awang Haji Mat Suny, the Energy, Manpower and Industry Minister of Brunei recently. As per the MoU, Brunei will supply Liquefied Natural Gas (LNG) to Bangladesh as the governments of the two countries “agreed to explore the possibility of comprehensive collaboration in the energy sector”, according to a combined statement.
Considering the current scenario, Bangladesh is in need of better energy provisions as the sector plays a crucial part in the country’s local industrial functioning. Up until the end of 2016, the industry to GDP ratio was soaring at nearly 33% , mainly due to a consistently available and abundant natural gas. However, the current supply deficit of natural gas is at an alarming high of nearly 700 Million Cubic Feet per day.
A difference of this scale has the potential to make an impact in the economic growth of Bangladesh, thereby slowing down the country’s overall development. Considering this, the Awami League government is taking multiple steps towards increasing the LNG supply so as to initially stabilize the demand-supply curve. The move will gradually transform it into the country’s primary energy source.
The MoU signed between PetroBangla, the government owned oil company of Bangladesh, and Switzerland based AOT Energy in June 2017 ensures 1.25 metric tons LNG supply for 15 years ought to be approved by the Energy Ministry and Cabinet Purchase Committee in the upcoming months. And though AOT Energy is a global company with decades of experience in implementation and support of energy infrastructure, the growing economic potential of Bangladesh requires the collective efforts of imports as well as home-grown players. Bangladesh is ready to take up the challenge.
Local leading companies such as Salman F Rahman’s Beximco Group could possibly surface as a major contributor towards the energy requirement of the country. Being a leading conglomerate with reasonable financial strength and resources, initiatives such as Kutubdia Energy Hub, one of the largest LNG and LPG handling terminals, are already in the pipeline to provide adequate support.
Furthermore, Salman F Rahman, as a parliamentarian and the private sector industry and investment advisor to Sheikh Hasina, is expected to accelerate the process of having competitive LNG supplies to Bangladesh as highlighted by AOT Energy in a recent letter. In addition, Rahman is most likely to devise an economic and feasible solution for Bangladesh’s energy security with his experience.
That said, increased LNG imports seem to be a plausible support, if not an immediate alternative to the energy resources of Bangladesh. With a well-maintained energy security sphere, Bangladesh has a bright chance to sustain an industry driven economic growth in the upcoming decades.