Excelerate Energy LP – a US-based Liquefied Natural Gas (LNG) solutions company – has been supplying gas to Bangladesh's national grid through its floating storage and regasification units (FSRU) located in the Moheshkhali coast since August 2018.
As the pioneer and global leader in floating LNG infrastructure, Excelerate wants to expand its collaboration with Bangladesh's energy ministry in implementing solutions to reliably supply gas into the western part of the country.
Speaking recently to The Business Standard, Excelerate's Vice President for Asia Pacific Ramon Wangdi said Bangladesh's next landmark gas project will need to focus on supplying underserved parts of the market.
For example, reliable gas supply should be made available in western districts of Barishal, Gopalganj and Khulna to meet consumer demand – utilising an LNG import facility through Payra in the Patuakhali district of southern Bangladesh.
Being a leading LNG solution provider and innovator, how is Excelerate Energy's service since 2018 contributing to Bangladesh's economic growth and energy supply stability?
To better understand the contribution of Excelerate's LNG facilities in Moheshkhali, one must first recognise the recent history of Bangladesh's vibrant energy sector.
This has been defined by the country being blessed with abundant supply of a very affordable, clean natural resource – namely natural gas, which it has produced domestically and in large quantities for decades.
Today, natural gas accounts for two-thirds of the country's energy mix, and over the years, this has allowed Bangladesh to develop its downstream energy infrastructure across the entire value chain – from pipelines to power plants, transmission grids, to gas dependent industrial factories and even within residential communities, where gas is used for cooking.
So, reliable gas supply has played an enormous role in underpinning the rapid growth of Bangladesh's rich diverse economy – an economy which has grown over 6% on average, since the turn of the century. A remarkable feat by international standards!
In more recent times, as domestic reserves continue to decline, imports of LNG have played an essential role in ensuring the continuity of reliable gas deliveries through an abundant supply from the global marketplace, so that the government may continue on its ambitious, but achievable, vision to become a high-income nation by 2041.
Since Bangladesh started importing LNG through Excelerate's FSRU facilities in Moheshkhali in 2018, the country steadily increased its gas supply through LNG imports – which today accounts for about one quarter of the country's total gas supply.
With this, LNG has brought enormous stability to the region's energy sector and has greatly contributed towards growing confidence in markets downstream, with many power plants and factories that previously lay dormant having now resumed operations.
As a result, further infrastructure investments are taking place within the southeast region, which has witnessed an economic boon since reliable LNG supplies were introduced.
Excelerate has operations across nine countries worldwide. What is your experience in operating FSRU in Bangladesh, which is a highly natural disaster-prone country?
With a global portfolio of 13 floating LNG terminals and over 60 years of regasification experience under our belt, there isn't much which Excelerate hasn't experienced in its operational history within the LNG industry.
While operating terminals in the Bay of Bengal indeed comes with certain distinct challenges – such as cyclonic conditions from time to time – we have been able to draw upon those experiences to supply LNG into Bangladesh safely, reliably, and sustainably for over 3 years now.
For example, one of Excelerate's first terminals, the Gulf Gateway in the United States, was located over 180KM offshore in the Gulf of Mexico, which is a hurricane prone region of the world.
At the time when "Katrina" – a category 5 hurricane that ravaged the coasts of Louisiana and Texas – made landfall, Excelerate's FSRU remained at the terminal, continuing to provide critical fuel supply to the gas grid during a time when the market needed it the most.
Experiences such as this and others have been invaluable to prepare Excelerate for environments like the Bay of Bengal.
Since we began operating in Bangladesh, we have faced two cyclones – Fani in 2019 and Amphan in 2020 – both of which had severe impact to the region, but I am happy to say that similar to our experiences in the US many years ago, we were able to continuously provide gas deliveries into Bangladesh throughout these events, and have generally had very minimal disruptions in our operations due to natural weather events.
This is a testament to the combined experience of Excelerate's entire operational team – men and women in the field, onshore and offshore, Bangladeshis and foreign – all collectively working together with Petrobangla and the government to face each challenge and overcome them together.
Global shift in adopting green energy solutions is undeniable, as is the science behind climate change which is driving this trend. I believe the only question is how fast and in what form will this adoption be for different countries around the world.
As a regional leader in this effort, I think Bangladesh has already taken bold action to play a substantial role on the global stage in contributing towards a decarbonised future – as evidenced by the country's recent cancellation of several coal projects, along with the government's focus on expanding Bangladesh's renewable programme.
Looking ahead, Bangladesh has a few fundamental issues that it needs to address for the successful broad-based adoption of renewables within the country's energy grid.
Firstly, when looking at renewables in isolation, it provides an incomplete energy solution due to its intermittency – for instance, how do you generate electricity when the sun is not shining, or the wind is not blowing?
Secondly, in order to implement utility-scale renewable facilities, projects require a substantial allocation of land. For example, a 100MW solar farm may take approximately 300 to 400 acres of land, which in a very densely populated country like Bangladesh comes at a significant cost due to the scarcity of land available for development.
For those reasons, I believe natural gas and LNG will continue to be instrumental in complementing renewables – first by ensuring continuous energy supply, by filling any gaps in generation from renewables, and secondly, by driving down net energy costs by enhancing energy efficiency and by utilizing existing infrastructure, such as pipelines, whose investments have already been made.
When coupled with the benefits in regards to clean air quality of gas over comparable fossil fuels, such as oil based fuels – which still accounts for about 30% of the country's energy mix, we believe that LNG clearly is, in and of itself, also a "green energy solution" for Bangladesh.
Bangladesh now plans to establish land-based LNG storage to meet the energy demand. Being the pioneer and market leader in floating LNG solutions, what is Excelerate's plan for the government's next project?
Since our founding, Excelerate has always focused its business on tackling the biggest problems within the energy sector of a market, and in turn, developing our technologies around finding solutions to these problems.
To this end, we look at every technical solution – whether it be land based, near shore or offshore – through this lens and ask ourselves "does this solution in fact address the root problem which needs solving for a particular country?"
In the Bangladeshi context, that core problem that needs solving has been increasing gas supply quickly, reliably, and affordably – and any technical solution that gets built to address this fundamental issue must account for these three key items in order to succeed.
With this in mind, land-based solutions are absolutely technically viable, but generally have been more costly and taken longer to construct. Floating LNG has effectively helped Bangladesh develop fast track solutions in addressing some of these issues.
What's next for Excelerate? Well, in keeping with this same philosophy, we believe the next major area in the country's gas sector which needed addressing was to broaden energy access to the under supplied regions of Bangladesh.
In particular, the western region of Bangladesh has not been able to secure the same reliable access to gas supply due to its further distance from existing supply sources.
For this reason, Excelerate began looking since 2018 at developing an LNG solution to supply gas into the Patuakhali, Barishal and Khulna districts – where currently there is no reliable gas supply source.
We have invested and been working diligently on developing a solution for supplying LNG into this region through an FSRU facility in Payra, and have submitted proposals to the Energy Mineral Resources Division and Petrobangla to implement the solution for gas supply through Payra all the way to Khulna.
We are in discussions with the government to implement this program, and if we can move forward quickly, we would have gas supply in Khulna by 2024.
Besides LNG products, Excelerate also has power solutions. Does it have any plan for working with Bangladesh's power sector?
As an integrated energy company, Excelerate actively looks for investment opportunities in all areas of the gas value chain, including the power sector, where we can most add value.
Within Bangladesh's power sector, there are two broad areas where Excelerate are exploring project development opportunities.
One is for new LNG-based power plants being developed along the coast of the country. An example of this is the 1,200MW Payra LNG power plant being developed by North-West Power Generation Company Ltd (NWPGCL) and Siemens.
The NWPGCL has an impeccable track record of execution for innovative complex projects in the region, such as Payra LNG, and we strongly believe this important project will add to that long list of their achievements.
Excelerate is in the final phases of a Joint Development Agreement for the Payra LNG power plant, which we hope to conclude shortly.
The second area is to convert or replace existing oil-based power plants to gas-fired or LNG based plants. These plants are typically highly inefficient and expensive to run. While they are usually smaller modular plants, when looked at as a whole, they still account for a big part of Bangladesh's power mix today – almost 30%.
Once reliable gas supply is made available, converting these plants to gas-fired is not only the greener choice, but also the more economical one.
These are the two segments of the power sector where Excelerate is most focused on within Bangladesh.
How do you project Bangladesh's energy sector scenario in the next 10 years? What areas need more focus?
Within the government's Vision 2041 plans, Bangladesh has laid what I believe is a very clear road map on the country's plans to continue on its path of socioeconomic growth.
As a key pillar of this plan, sustainable growth of Bangladesh's energy sector will be crucial, as the government plans to double its energy generation capacity to about 40GW by 2041.
In the next decade, as Bangladesh looks to strongly rebound from the pandemic in unison with the rest of the world, the energy sector must take steps now to prepare for what we fully expect to be a multi-year period of explosive economic recovery around the world.
This growth must be met with bold policy decisions, fiscal prudence, and continued innovation in project implementation models and technologies. This will require an even deeper collaboration between public and private sectors in the next ten years, when compared to the prior decade.
LNG will continue to be an instrumental part of that story in supporting Bangladesh's journey towards meeting its targets.
In the next ten years, I believe LNG paired with robust gas distribution solutions can greatly contribute towards two main goals within Bangladesh's energy sector – firstly, to broaden energy access throughout the country, and secondly, to greatly increase energy efficiency.
Continued investment in downstream gas infrastructure will be essential – such as continued investments in the country's pipeline network, expanding use of CNG in the transportation sector and LNG trucks to deliver LNG to off grid customers that are currently disconnected from gas supply.
In its CSR policy, Excelerate focuses on Health, Education and climate. Would you say a bit about your CSR activities in Bangladesh?
Similar to many US energy companies, Excelerate follows a partnership model in all the markets in which we operate globally – not only with our customers, but also within the communities in which we serve and operate.
In Bangladesh, we have concentrated our community investments towards addressing some of the most important sustainable development goals which the government has clearly set as key areas of focus – such as the areas of clean energy, reducing the gender gap, healthcare and education.
Before the pandemic, this manifested itself in various initiatives such as where Excelerate engages with schools within the communities of Moheshkhali to distribute school supplies or advancing on our Solar Maternity Clinic project – a solar powered hospital which provides maternal healthcare to women in the rural communities where we are operating.
Naturally, during the pandemic, our CSR program has been more focused on supporting Bangladesh in its time and areas of greatest need, so that it may overcome the devastating effects of Covid-19.
This has meant sponsoring various programmes which contribute towards the recovery effort, such as the Hope Foundation infectious disease center opened in Cox Bazar in 2020, or through the sponsorship of project CURE – a program coordinated by the US Chamber of Commerce and USAID, where Excelerate along with other US companies made donations of medical supplies and other essential medical equipment to support Bangladesh's fight against the pandemic.