Reuters are reporting that Bangladesh's plan to start importing LNG next year will likely dampen its demand for oil used in power generation.
The South Asian nation typically ships in approximately 2.5 million tpy of fuel oil and 3.2 million tpy of diesel, making it one of the top 10 such importers in the region.
However, its push towards cleaner gas is likely to displace some of that appetite for oil, with the country's first FLNG import terminal due to begin accepting cargoes in May next year.
State-run Petrobangla has signed preliminary deals for two more LNG terminals and a memorandum of understanding with Swiss commodity merchant AOT Energy for help lining up supplies. It has also said that it is in talks with top LNG producer Qatar.
Of the total 13.3 gigawatts of installed electricity capacity in Bangladesh, about 63% is from gas-fired plants, 22% from plants powered by fuel oil and 8% from diesel.
While it was not clear how much of the country's import demand for oil products would be displaced by LNG, it would probably start to happen in 2019.
LNG is currently approximately 15 to 20% cheaper than fuel oil.
Bangladesh's imports of LNG are expected to reach 5 million t in 2020.
Read the article online at: https://www.lngindustry.com/floating-lng/06072017/bangladesh-lng-drive-likely-to-hit-its-oil-demand/