Dhaka discusses gas import from Myanmar

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M Azizur Rahman
The local demand for gas, driven by the country's growing private sector, is forcing the government to consider import of natural gas from neighbouring Myanmar, said sources.
The Karnaphuli Fertiliser Company Limited (KAFCO), an export oriented international joint venture fertiliser factory owned by Bangladesh, Japan, Denmark and the Netherlands, is now keen to use Myanmar gas to install its new unit for enhanced production, a senior official of the Energy and Mineral Resources Division (EMRD) told the FE.
He said the KAFCO, which has a capacity to produce 1,727 tonnes of urea and 1500 tonnes of ammonia fertiliser per day, has recently taken up a plan for increasing its production capacity by 55,000 tonnes per year.
The fertiliser factory is located at Rangadia in Chittagong just alongside the Karnaphuli River, around 200 kilometers off the Myanmar border.
Gas to the tune of at least 100 million cubic feet per day (mmcfd) will be required for KAFCO to fuel its increased fertiliser production.
Besides, the entrepreneurs of the Korean Export Processing Zone (KEPZ) are also interested to procure Myanmar gas for use in their industrial units.
Both the KAFCO and the KEPZ is located in the country's southeastern region, which is now facing severe gas crisis.
"A private sector led consortium consisting KAFCO and KEPZ is ready to invest in laying down the gas pipeline if Bangladesh and Myanmar agree on the issue of gas import," Chairman of the Bangladesh-Myanmar Business Promotion Council (BMBPC) Syed Mahmudul Huq told the FE.
He said initially the imported gas would be used for producing fertiliser in the KAFCO as an input for the planned contract farming in Myanmar.
The Myanmar government has already intended to provide 50,000 acres of land for farming by Bangladeshi companies.
As Myanmar does not have enough fertiliser production, it wants the Bangladeshi farms to use their fertiliser in the contract farming on Myanmar land.
Pushed by private sector needs the caretaker government has recently discussed the issue of importing gas with a four-member Myanmar delegation, led by Deputy Foreign Minister U Kyaw Thu, who just completed Bangladesh visit during July 22-24 last.
A high-powered delegation from Myanmar will also visit Bangladesh in August to discuss further on the issue of gas import, EMRD sources said.
If everything goes smoothly Bangladesh will import gas from Rakhine state of neighbouring Myanmar through pipeline.
Myanmar has a gas reserve of 16 trillion cubic feet (TCF) in Rakhine, closest to Chittagong area of Bangladesh where the KAFCO and KEPZ are located.
Regarding Myanmar gas, Bangladesh was earlier in a position to allow a gas pipeline through its territory to carry Myanmar's gas to India.
The negotiation on proposed US$1.0 billion tri-nation gas pipeline has remained stalled for long.
Bangladesh, which was considering gas export to neighbouring India six years ago, now intends to import gas from neighbouring Myanmar to meet its demand as its natural gas reserve is depleting fast.
The US oil giant Chevron's predecessor Unocal had submitted a proposal to the previous Bangladesh government in 2001 outlining its plan to export gas from its Bibiyan gas field in Bangladesh to India, which was later dropped following opposition from people.
Justifying Bangladesh's gas import a senior EMRD official said Bangladesh's 'over-dependency' on natural gas coupled with absence of necessary exploratory works have pushed the country into a vulnerable position in terms of gas reserves.
According to the EMRD's latest review, the country will need a further 24 trillion cubic feet (TCF) of gas in the next 18 years up to 2025 to achieve the moderate annual economic growth at seven per cent.
Bangladesh's proven reserve of 8.39 TCF gas is set to exhaust by 2011. If proven and probable reserves of around 14.4 TCF are taken together, the country's gas stock will be emptied by 2015, the EMRD pointed out.