Bangladesh Mulls Buying Burma Gas to Meet Shortage – Paper

Text of report by Bangladeshi newspaper Prothom Alo on 11 March

Gas was not available in Block 16 of offshore gas field adjacent to the Hatia region. The Netherlands-based company Cairn Energy, appointed as the operator of this block, gave this information. The Ministry of Power, Energy and Mineral Resources and the state-run Petrobangla further confirmed this report.

After getting this information, Petrobangla has taken decision to control the gas supply to the bulk consumers. As a result, the electricity production would be reduced in the coming summer. Sources in the Power Development Board [PDB] told Prothom Alo that the power crisis would be further deepened in the coming days.

Cairn Energy started the digging operation in the Hatia region for exploration of gas in January. There was, however, no sign of finding gas from there. Finally, the company informed Bangladesh authorities that there was no possibility of getting commercially exploitable gas reserve in Hatia like South Sangu and Magnamara. Ministry sources said that Cairn Energy wanted some more time to officially convey its decision. The company said that it wanted to further continue the digging operation. The company is also interested in trying further in Magnamara where it earlier abandoned its exploration bid.

Cairn Energy started digging Magnamara gas field in December 2007; after primary exploration, it informed that there was no possibility of finding gas from that field. However, on the basis of its seismic survey report, the company had said earlier that there was at least 3,500bn cubic feet of gas in this field. Earlier, it failed to find gas in South Sang. However, after its failure in Magnamara, it launched fresh efforts to explore gas from Hatia. As per the survey report of Cairn Energy, there is a huge gas reserve in Hatia.

After South Sangu and Magnamara, the non-availability of gas in Hatia is bad news for the energy sector of the country. After receiving such alarming news, Petrobangla has started to prepare a priority list of bulk customers for the rationing of gas. Petrobangla has decided to reduce supply of 8m cubic feet of gas per hour to several power generation plants, including state-run Ghorashal, Ashuganj, Siddirganj and Tongi plants and private power generation stations of Meghnaghat, Mymensingh and Haripur. Petrobangla has also conveyed this decision to the PDB. However, Petrobangla sources said that there would be a slight modification in its decision. It would reduce gas supply to fertilizer factories and increase gas supply to power stations.

As per Petrobangla’s rationing system, Ghorashal Power Plant would get 4.5m cubic feet of gas against its demand of 7.5m cubic feet per hour, Ashauganj would get 4.9m cubic feet against its requirement of 6.5m cubic feet, Siddhirganj and Rural Power Company would get 1.1m cubic feet of gas each against their total requirement of 2m cubic feet each. Tongi and Haripur power plants would be given 0.9m cubic feet of gas each against their requirements of 1.5m cubic feet each. Against its per-hour requirement of 2.5m cubic feet, Meghnaghat will receive 2.9m cubic feet of gas. The PDB sources told Prothom Alo that because of such poor supply of gas, production of at least 400 megawatt of electricity would be reduced.

Meanwhile, Petrobangla conveyed to some proposed power plants, which were scheduled to start operation by 2010-12, that no gas supply would be possible to them. The installation of new connections in Chittagong [southeast Bangladesh] and export processing zones were kept suspended from much earlier. Petrobangla has referred the issue to the Planning Commission with a request to deeply consider the gas situation before approving any gas plants to be financed by any local or foreign agencies in future.

The country’s gas reserve has gradually been reducing, as no new gas fields could be unearthed in the last few years. If we consider the growth of gross domestic product [GDP] at 7 per cent and the gas is consumed in that proportion, the existing proven reserve of gas resources would come down to 8,000bn cubic feet by 2011. But the country would need gas resources of 24,000bn cubic feet if we want to register the same rate of GDP growth up to 2025.

The current demand of gas in the country is around 1,800m cubic feet per day. It is less by 1,000m cubic feet of the total production in the country. The shortfall of gas can only be met by increasing production in Bibiana gas field of Sylhet. Petrobangla and the Energy Ministry, however, think that it is not possible to ensure supply of gas to all big installations by depending only on this single source.

About 60 per cent of the total production of gas in the country is utilized in power plants and fertilizer factories. In both these sectors, the demands of gas have been increasing every year. But the production is not increasing as no new gas fields could yet been found.

However, the US-based oil and gas exploration company, Chevron, is going to start seismic survey from the next month in Moulvibazar under Block 13 in search of new gas resources. The seismic survey will also begin soon in St Martin and Cox’s Bazar under Block 14 by a French company, Total Gas. The concerned companies are very much hopeful of having considerable gas reserves in this region.

Besides, there is prospect of getting huge gas reserve in the offshore areas of the Bay of Bengal. The council of advisers has finalized the production sharing contract and international bidding documents on 5 February to invite the international companies for giving lease of 28 blocks for exploration of gas and oil in the exclusive economic zones of Bangladesh in the Bay of Bengal. The council of advisers also approved the draft international tender papers. International tenders seeking proposals from the prospective international oil and gas companies were also floated on 15 February. The government has plans to lease all the blocks to the successful bidders by October next. Still it would take several years to explore gas and oil from the offshore fields. Considering such acute gas crisis, the government is thinking over importing gas from Burma.

Originally published by Prothom Alo, Dhaka, in Bengali 11 Mar 08, pp 19, 20.

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