Enhancing Energy Security And Sustainability: ASEAN-Bangladesh Energy Cooperation – Analysis
Energy cooperation between ASEAN (Association of Southeast Asian Nations) and Bangladesh is becoming increasingly crucial for ensuring regional energy security, promoting sustainable energy development, and fostering economic growth.
To understand the context of ASEAN-Bangladesh energy cooperation, it is important to review ASEAN’s progress in the energy sector. The following indicators demonstrate significant advancements: Energy Intensity (EI) reduction based on 2005 levels has reached 24.5%. Renewable energy’s share in ASEAN’s total primary energy supply (TPES) or energy mix is 14.4%, while its share in installed power capacity is 33.6%.
Out of 18 planned bilateral interconnections under the ASEAN Power Grid (APG), nine are operational. There are 11 regasification terminals in five ASEAN countries, with a total regasification capacity of 48.5 million tonnes per annum (MTPA). Six countries are connected by 13 cross-border pipelines, which have a total length of 3,631 km. Clean coal technology (supercritical and ultra-supercritical) contributes 18.9 GW to the installed power capacity, and there are 13 coal-biomass co-firing power plants with a total capacity of 7.3 GW. Additionally, 11 carbon capture and storage (CCS) facilities are under development.
The overall scorecard of the APAEC Phase II: 2021-2025 implementation is 4.3 out of 5. Furthermore, 350 policymakers have been trained through regional nuclear capacity-building initiatives. These indicators reflect ASEAN’s commitment to reducing energy intensity, increasing renewable energy usage, and enhancing energy infrastructure, which provide a strong foundation for cooperation with Bangladesh.
This article dives into the current state of energy cooperation, highlights key agreements and projects, and explores future opportunities for collaboration.
Bangladesh, a rapidly developing nation, showcases significant diplomatic efforts in terms of energy security, reliability of supply, and sustainable development. The country relies heavily on natural gas for electricity generation and is seeking to diversify its energy mix by integrating more renewable energy sources and importing LNG (Liquefied Natural Gas).
On November 24, 2022, Bangladesh proposed importing 1.5 million tonnes of LNG from Brunei, aiming to secure a 10-15 year agreement. This long-term agreement highlights the strategic partnership between the two nations in ensuring energy security. On June 15, 2022, Indonesia shared joint venture (JV) investment proposals worth approximately $1.3 billion in Bangladesh’s energy sector. This collaboration is set to bolster Bangladesh’s energy infrastructure and supply. Additionally, on September 5, 2023, the foreign ministers of Bangladesh and Indonesia signed an MoU on energy sector cooperation, further solidifying their partnership.
Malaysia has been a key partner in Bangladesh’s energy sector. On September 22, 2014, Bangladesh and Malaysia signed an agreement to set up a 1320 MW thermal power plant at Maheshkhali. More recently, on July 19, 2023, Bangladesh engaged in talks with a Malaysian firm to secure an annual supply of 1 million tonnes of LNG under a 15-year contract. This agreement is part of Bangladesh’s broader strategy to meet its growing energy demand through diversified sources. Besides the existing deals, Bangladesh signed a new deal on June 1, 2023, with Qatar to get an additional 1.5 MTPA of LNG for the next 15 years from 2026. Another agreement was signed with Oman on June 20, 2023, to import more LNG from the Middle Eastern country. As per the new agreement, the Omani state-owned company, OQT, will supply LNG ranging from 0.25 to 1.5 MTPA to Bangladesh over 10 years from 2026. On July 13, 2021, Bangladesh and Malaysia signed another deal to cooperate on the supply of Liquefied Natural Gas.
Efforts to revive the Myanmar-Bangladesh-India (MBI) gas pipeline project have been ongoing. Initially conceived in 1997, this 900 km pipeline was designed to supply 5 billion cubic meters of gas from Myanmar to India via Bangladesh. Despite initial setbacks due to policy differences and financial constraints, recent discussions have revived hopes for this project. The MBI pipeline could significantly enhance energy security and economic development in the region. Recent reports suggest that the stalled talks on the MBI project will resume soon. The proposed project was re-examined during Indian Prime Minister Narendra Modi’s landmark visit to Dhaka in June 2015.
Earlier, in June 2013, India’s then-Commerce Minister Anand Sharma restarted discussions on the MBI pipeline during his visit to Naypyitaw to attend the East Asian Forum and explored the possibility of the two blocks awarded to ESSAR. Bangladesh’s current PM Sheikh Hasina-led Awami League government has also expressed its intent to re-negotiate the MBI project. An alternative 1575 km long pipeline route bypassing Bangladesh did not take off mainly due to a lack of funding. According to an estimate made in 2005, the second option would cost around $2.3-3 billion, while the MBI pipeline project was estimated at $1 billion. The import of gas is essential for the economic development of India’s isolated North Eastern region. The MBI project could meet India’s long-term energy requirements.
On February 7, 2024, the Cabinet Committee on Government Purchase in Bangladesh approved three separate proposals for LNG imports from Singapore. Petrobangla, the state-run agency, will import LNG cargoes from Golbar Singapore Limited and Vitol Asia (Pvt) Limited, demonstrating the growing trade relationships and reliance on Singapore for LNG supplies. Each cargo will contain 33.60 lakh MMBtu, costing Tk425.81 crore from Golbar and Tk422.48 crore from Vitol, with each unit priced at $9.847 and $9.770, respectively. Energy Division officials mentioned that Bangladesh plans to import a total of 13 LNG cargoes in the first six months of the year.
ASEAN’s progress in renewable energy presents numerous opportunities for Bangladesh to collaborate on sustainable energy projects. Bangladesh can benefit from ASEAN’s expertise in increasing the share of renewable energy in the energy mix, particularly in solar and wind energy. Joint ventures and knowledge-sharing initiatives can help Bangladesh achieve its renewable energy targets and reduce its carbon footprint. ASEAN’s advancements in energy infrastructure, such as regasification terminals, cross-border pipelines, and clean coal technology, offer valuable insights for Bangladesh. Collaborative projects in these areas can enhance Bangladesh’s energy infrastructure, improve energy efficiency, and ensure reliable energy supplies. Additionally, partnerships in developing carbon capture and storage (CCS) facilities can contribute to reducing greenhouse gas emissions.
Bangladesh can benefit from ASEAN’s experience in policy development and capacity building in the energy sector. Training programs, workshops, and policy exchange initiatives can help Bangladeshi policymakers and energy professionals develop the necessary skills and knowledge to implement effective energy policies and strategies. This collaboration can lead to better regulatory frameworks, improved energy governance, and enhanced institutional capacity. ASEAN countries, with their growing economies and investment capabilities, can play a crucial role in financing energy projects in Bangladesh. Joint ventures, public-private partnerships, and foreign direct investments can provide the necessary financial resources for large-scale energy projects. This collaboration can accelerate the development of energy infrastructure, promote technological innovation, and create job opportunities in Bangladesh.
Regional energy integration is a key focus for ASEAN, as evidenced by the ASEAN Power Grid (APG) and other cross-border energy projects. Bangladesh can explore opportunities to integrate with regional energy networks, facilitating the exchange of energy resources, enhancing grid stability, and ensuring energy security. Participation in regional energy initiatives can also provide access to a larger energy market and attract investments from neighboring countries.
ASEAN-Bangladesh energy cooperation holds immense potential for addressing energy challenges, promoting sustainable development, and fostering economic growth. The existing agreements and projects, along with future opportunities for collaboration, highlight the strategic importance of this partnership. By leveraging ASEAN’s advancements in renewable energy, energy infrastructure, policy development, and regional integration, Bangladesh can enhance its energy security, diversify its energy mix, and achieve its sustainable development goals. The future of ASEAN-Bangladesh energy cooperation looks promising, with both regions poised to benefit from mutual collaboration, shared knowledge, and joint investments. As they continue to strengthen their energy ties, ASEAN and Bangladesh can pave the way for a more secure, sustainable, and prosperous energy future.
