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Bangladesh’s May HSFO imports to rise 10% on month, led by higher power demand

Bangladesh’s high sulfur fuel oil imports are set to increase on the month in May, as scorching summer temperatures have boosted overall power generation demand and the country’s dependence on HSFO-fired utilities has increased following the tropical cyclone Remal, which flooded the coastal areas and disrupted electricity supplies, industry officials said May 28.

The May fuel oil imports, however, would be lesser compared with the corresponding month a year ago, as the country has been resorting to cheaper alternatives such as coal and gas for power generation over the last one year.

The South Asian country plans to import around 275,000 mt of 180 CST HSFO with 3.5% sulfur in May, up 10% on the month, but about 21.4% lower from the same period a year ago, when Bangladesh had imported around 350,000 mt, said Faisal Khan, the president of Bangladesh Independent Power Producers’ Association.

Surging power demand and relatively better purchasing capacity of the HFSO importers at present were boosting volumes this month, Khan added.

Bangladesh has also been relying more on the HSFO-fired power plants due to the tropical cyclone Remal that wreaked havoc on its coastal areas and parts of neighboring India after making a landfall late May 26, said Md Kamruzzaman Khan, director for operations and mines at the state-run national gas company Petrobangla.

Bangladesh Oil, Gas and Mineral Corp., also known as Petrobangla, lowered the rates for LNG re-gasification from the country’s two floating storage regasification units to less than one-third of the capacity to 320 MMcf/d for several days running up to May 26 to avoid any damage of the FSRUs and the mooring facility from the cyclone, Khan said.

At least one LNG tanker, Gaslog Geneva, was taken off to the deep sea near Kutubdia Island in the Bay of Bengal as a precautionary measure to avoid any damage from the cyclone, he added.

About 30.3 million power consumers, or 64.5% of the 47 million ones across Bangladesh, were without power due to cyclone Remal’s mayhem, according to the Ministry of Power, Energy and Mineral Resources. However, the ministry said power supply to 80% of the affected consumers was restored by May 28 night.

Bangladesh’s total generation capacity from HSFO-fired power plants is around 6.441 GW, with the country’s private sector importing the major share of fuel oil to run its power plants and the state-run Bangladesh Petroleum importing the remainder.

However, several HSFO-fired power plants in Bangladesh nearing completion of their tenures have been on track to be shut, partly contributing to a downtrend in HSFO imports over the past one year, a senior official of Bangladesh Power Development Board said.

Meanwhile, the wider Asian HSFO market has garnered strength in recent weeks, buoyed by tighter supplies and stable downstream bunkering demand, while an uptick in imports from South Asian markets was providing seasonal strength, trade sources said.

Singapore exported 26,533 mt of fuel oil to Sri Lanka and about 15,048 mt to Bangladesh in the week ended May 22, compared with no outflows to these destinations in the previous week, latest Enterprise Singapore data showed.

The FOB Singapore cargo price for 180 CST HSFO has averaged $513.28/mt so far in May, compared with an average of $508.59/mt in April, Commodity Insights data showed.

Platts assessed the benchmark Singapore 380 CST high sulfur fuel oil cargo’s cash differential to the Mean of Platts Singapore 380 CST HSFO assessment at a premium of $10.18/mt May 28, while the Singapore 180 CST HSFO cash differential to the MOPS 380 CST HSFO assessment was at a premium of $10.20/mt – both hovering close to their highest levels in more than eight months, Commodity Insights data showed.
Source: Platts

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