Cairn submits $6m investment plan to shore up Sangu gas supply

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M Azizur RahmanbrWeeks after dropping its extensive exploration programme in Magnama and Hatiya structures in the offshore, the UK-based Cairn Energy has now decided for a well work-over plan in the operational Sangu gas field.brWe have recently submitted an investment plan worth around US$ 6.0 million to install compressors and conduct well intervention programmes in the offshore Sangu gas field, company insider told the FE Sunday.brHe said further works in the almost dried up Sangu gas field would help supply of commercially viable gas from the field until 2011.brWithout the proposed investment the Sangu would have no commercially extractable gas beyond 2009, said the company official.brThe company has so far invested around $1.0 billion in Bangladesh and over half of the amount has been invested only in Sangu gas field, some 20 kilometres off the Chittagong seashore.brGas production from Sangu slumped to 44 million cubic feet a day (mmcfd) Sunday from its average production of 180 mmcfd during 2006, seriously affecting the supply situation across Chittagong.brWe have received a proposal from Cairn regarding its investment in Sangu gas field, Petrobangla director, PSC, Md Muqtadir Ali told the FE.brA joint management committee (JMC) would make a decision on it, he added.brCairn last month sought either a higher price for its newly discovered gas in Magnama and Hatiya structures or a go-ahead signal from the government to sell the output to private users.brBut it has dropped its planned exploration in new offshore structures as the Petrobangla showed its unwillingness to hike gas price or allow the sale of gas to private users.brCairn discovered the Sangu gas field in 1996, from where production started in 1998.brRegarding Sangu's reserve, Cairn at the initial stage informed Petrobangla that Sangu's estimated reserve of gas was 1.3 trillion cubic feet (Tcf) and the amount of recoverable gas was 900 Bcf. brIt said it could extract 200 mmcfd of gas per day from the field. brIn 2006 in its annual report, the company changed its reserve data drastically and said the recoverable gas was 247 Bcf.brAnd in August last it said it has only 14 billion cubic feet (Bcf) remaining reserves.br