One of Bangladesh鈥檚 two floating storage and regasification units remained offline in six of the first nine months of this year, said a report released on Monday by the US-based Institute for Energy Economics and Financial Analysis.
聽The FSRU, the offshore terminal to import liquefied natural gas, is owned by the Summit, which initially remained on routine maintenance in Singapore between January 22 and March 31, said the report titled 鈥楩loating LNG import聽 terminals post cost and climate challenges for Asian markets.鈥�
聽On May 24, the FSRU halted operations due to Cyclone Remal, which brought wind speeds of 25-33 metres/second. The storm sent a steel structure crushing on the terminal, causing significant damage to the vessel鈥檚 hull, prompting the government to cancel four LNG shipments thereafter and sent the FSRU again to Singapore for repairs, the report said.
聽Initially expected to resume operations within three weeks, unexpected damage to the subsea mooring system prevented engineers from reconnecting the FSRU upon its return from Singapore in early July. Flooding in eastern Bangladesh caused silt to turn seawater murky around the time, hampering underwater visibility and the reconnection process.
聽The Summit Group said that the initial diving vessel used to fix the subsea equipment was unable to exert the force required, leading to the need to bring to the site a stronger vessel for the reconnection.
聽The FSRU was finally reconnected on September 11 after 131 dives in challenging conditions with engineers from around the world, the report said. LNG deliveries to the terminal resumed on September 19.
聽Cyclone Remal lasted four days, but the FSRU was offline for nearly four months, reducing the country鈥檚 gas supply and, in turn, causing outages at several gas-fired power plants.
聽The storm killed at least 19 people and caused nearly Tk聽7,000 crore in economic losses and damage, in addition to the Tk聽2,600 crore demanded by the Summit 鈥� partly owned by Japan鈥檚 JERA and Mitsubishi 鈥� for contractual payments during the time the terminal was offline.
聽鈥楽tronger and more harmful weather events increasingly threaten the reliability of offshore LNG projects and the energy security of importing countries,鈥� said Sam Reynolds, a co-author of the report and the Research Lead for IEEFA Asia.
聽Following the cyclone and recent political change in Bangladesh, the new interim government terminated Summit Group鈥檚 application for a second FSRU and rejected a bid by Excelerate Energy 鈥� the world鈥檚 largest FSRU owner 鈥� to build another vessel in the Bay of Bengal.
聽Throughout Asia, 122 LNG terminals are under development, 22 of which are floating configurations. Nearly 90 per cent of the floating projects planned in South and Southeast Asia are in countries prone to tropical storms and typhoons or cyclones, including India, the Philippines, and Vietnam.
聽New terminals in the Philippines have already faced weather-related operational challenges, while unfavorable conditions along Vietnam鈥檚 coast challenge the applicability of floating import configurations.
聽Bangladesh imports LNG through another FSRU at Moheshkhali which began operating in 2018. Operations at the country鈥檚 first offshore LNG terminal were disrupted for months during the monsoon season in 2018.
聽In 2021, the Summit LNG terminal was out of service for three months due to a damaged mooring line, resulting in gas shortages for power plants, industries and households.
聽In May 2023, Cyclone Mocha shut down both of the country鈥檚 terminals, followed by maintenance work for the Moheshkhali terminal from November 2023 to January 2024.
聽Both the LNG import terminals have a contract to receive $500,000 every day as regasification charge, not subject to the actual amount of gas handled. The regasification charge is reminiscent of the capacity charge awarded to private power plants, guarantying them hefty return irrespective of actual power produced.
聽The IEEFA report said that the wind limit for connecting an LNG tanker to an FSRU may be less than 7.5m/s, while a cargo may be offloaded safely at wind speeds below 13m/s. The FSRUs require wave heights are below 2 metres to berth and unload LNG, and are unable to navigate if waves exceed 3.5m.
Tropical depressions are characterised by wind speeds up to 17 m/s, while tropical storms can reach up to 33m/s. Wave heights from tropical storms vary due to a variety of factors.
High average wind speeds throughout South and Southeast Asia are often cited as a boon for offshore wind energy potential, the report said.
