Imbroglio over LNG supply

Editorial

That the government agencies are incapable of delivering designated services due to their incompetence and lack of coordination has again been proved in the case of an important energy sector operation---import of liquefied natural gas (LNG) and supply of the same to the transmission pipeline through re-gasification at a floating terminal. Their incapability is responsible for a couple of negative outcomes--- the consumers are not getting sufficient gas and the government is counting financial loss in the form of 'capacity payment'. The entire LNG operation is dependent on external sources. The LNG is an imported energy item and its re-gasification is done at a floating terminal under contract with a US-based company at a substantial cost. Projects of this type do demand meticulous planning and efficient operations. But those are the areas where the state enterprises have been faltering. Things have not been in right order since the beginning. The government struck deals with external supplier of LNG and commissioned FSRU (floating, storage and regasification unit), but could not make available gas to the consumers since the transmission line was not in place.

Another state-agency, the Gas Transmission Company Limited (GTCL) could not complete the construction of the transmission line.  The Petrobangla had to count a large amount as capacity payment on daily basis for its failure to use the capacity of the FSRU for nearly three and a half months. Now the situation is altogether reverse. The long-awaited Anwara_Fouzdarhat section of gas transmission line is fully functional, but it is receiving a very small quantity of gas from the FSRU for scarcity of imported LNG.  And the Petrobangla is now making capacity payment to the FSRU since it does not have enough LNG for regasification.

The Petrobangla, to be honest, has been in a difficult situation since it started its LNG operation. The delay in laying the transmission line made things difficult for it. The corporation had made deals with external LNG supplier/s and floating terminal contractor as per the schedule given by the GTCL. When the latter failed to complete the laying of the transmission line, the Petrobangla got into troubles. Now the transmission line is ready, but there is scarcity of LNG. The import of a fresh LNG consignment takes at least three months.

The government has gone for LNG import to help consumers suffering badly due to poor supply of this cheap and clean energy. But the lack of coordination among relevant state agencies has largely defeated the very purpose of the move. Rather, anomalies of all sorts have been subjecting the national exchequer to unnecessary compensation payments. In this case, it would have been better for the Petrobangla to wait for completion of the transmission line before going for deals with external agencies. The delayed execution of projects has emerged as a serious national problem in recent years. It is taking a heavy toll on the national economy, in terms of cost overruns, in addition to creating other problems. Allegations have it that the delay is often caused deliberately. However, the government instead of addressing the problem has taken a lenient approach to it. Issues like the failure to supply gas in adequate volume would continue to crop up in greater numbers in the future if the government is not serious about dealing with the problem of delayed implementation of projects and programmes.

• Courtesy: The Financial Express /Dec 19, 2018