ADB suggests independent operation of BERC

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FE Report
The Asian Development Bank (ADB) has made a set of recommendations including removal of existing subsidies, reduction of systems' losses and enhancement of managerial capacity for the development of gas sector in Bangladesh.
The country also needs to enhance the seismic mapping, particularly in the offshore blocks, in order to reduce investment risk and thus improve foreign investment in the gas sector, the ADB said in its latest study.
The Manila-based multilateral funding agency identified exploration, develop ment, and enhancement of capacity building in production as major challenges for ensuring the gas supply security in Bangladesh.
The power sector should become the dominant user of gas, by way of modern combined cycle gas turbine technology, which, according to the study, is another major challenge for the promotion of the country's gas sector.
It further recommended for increasing the seismic mapping, particularly in the offshore blocks, which "will reduce investment risk and thus improve international investment," the study revealed.
Gas pricing and subsidies still remains one of the main problems for challenge of basing the business of the gas sector on a market-driven model, and for the removal of all indirect and cross-subsidies, it said.
The study also found that the lack of transparency in business as another important challenge for the reduction of system losses in the gas sector.
It also suggested for ensuring an accurate monitoring system by implementing field management accountability and reward for gas unaccounted for and for reduction in system losses, respectively.
Identifying the absence of adequate support from the energy sector for the recently formed Bangladesh Energy Regulatory Commission BERC, the study suggested that the BERC should function independently.
According to the study, the currently known gas reserves of Bangladesh, defined as 1P (proved or with probability of 90 per cent of equal or greater volume) and 2P (probable or with probability of 50 per cent exceeding) are sufficient to satisfy the domestic gas market until the 2011, or at most, 2018 period.
The estimates as to the maximum (down to probabilities of 5.0 per cent) gas discoverable and viable for production suggest a maximum horizon of domestic supply up to 2050, it mentioned.
Thus, Bangladesh will need to resort to energy supplies other than domestically produced natural gas, the study said, adding that it was difficult to predict the real domestic need for hydrocarbons in such a long time-span considering the changes in energy technology expected in the next two decades.
A significant confusion in the energy needs is caused by the studies conducted by such authoritative sources as the United States (US) Department of Energy and Energy Information Administration (EIA), as those institutions cannot adjust their forecasts by relying on energy technologies not yet commercially implemented let alone undiscovered," it said.
The Bank, however, reiterated that an estimated capital required of US$ 1.5 billion per new one billion cubic feet per day (bcfd) production must be secured together with the necessary know-how to enable production from more complex deposit structures to be mobilised in the future.
The government must enable an investment recovery structure which will attract international oil company (IOC) investment and provide optimal benefit to the country, it noted.