Consumption of natural gas is high and the discovery of new gas fields is relatively low in Bangladesh. Such a mismatch is posing a big threat to the country's energy security. The existing gas reserve is depleting fast -- at a rate of about 1,000 billion cubic feet (bcf) a year. Unless the situation is changed, distribution of gas to the power plants, industrial power generators, CNG filling stations and fertiliser factories will be in jeopardy.
According to Petrobangla data, the consumption of gas was 11 times more than the volume of the same discovered during last 15 years. Since 1999, state-run and foreign companies have discovered only three fields -- Bangura and Srikail in Comilla and Sundulpur in Noakhali -- with 750bcf of recoverable gas. But in just 15 years, 8,140bcf of gas have been consumed.
Reports say all CNG-run vehicles and more than 2.0 million domestic consumers might be deprived of their access to gas very soon. There has not been any remarkable achievement in oil and gas exploration after the '90s. Such a situation forced the authorities concerned to extract gas at an excessive rate from the existing reserves which is an undesirable development, according to experts. In 2004, Irish oil company Tullow discovered the Bangura field in Comilla with a recoverable reserve of about 500bcf of gas, almost a half of which has already been extracted.
During the tenure of the current grand alliance government, US oil company Chevron failed to discover potential gas reserves in hydrocarbon Block 7 in Patuakhali and Moulvibazar while Bapex's bid to locate gas in Sunetra and Kapasia structures ended in fatality. The volume of recoverable natural gas in Rashidpur and Titas gas fields has, however, increased by about 1,500 bcf in two years after Petrobangla subsidiary Bapex had conducted three dimensional (3D) seismic surveys on the fields.
However, Petrobangla has signed a deal with the US oil company ConocoPhillips early this week for oil and gas exploration in the shallow sea block 7. It will soon sign two other agreements with Indian state-run Oil and Natural Gas Corporation Videsh for hydrocarbon exploration in the shallow sea blocks 4 and 9.
Petrobangla is now struggling to meet the growing demand for natural gas as it supplies about 2.3bcf of gas a day against a demand for more than 3.0bcf. The consumption of natural gas, now estimated at 800 bcf, has experienced a substantial growth in 15 years as the demand 14 years ago was less than 330 bcf a year.
In fact, the energy sector was running without a medium-to-long term plan and the supply and demand management has been done on an ad hoc basis. The expansion of demand for gas was largely unplanned, without taking into account its limited availability.
The government has tried to expedite oil and gas exploration but there have been no significant discoveries. In the meantime, the existing reserve has come intense pressure because of the rising demand for gas. Petrobangla is now giving priority to oil and gas exploration in the Bay of Bengal and reassessing old fields to explore the possibility of increased extraction of gas. Many experts are of the opinion that domestically mined and imported coal should replace natural gas in power generation and liquefied petroleum gas should replace piped gas for household use. But the government continues to set up gas-fired power plants in both the public and the private sectors.
Quite a number of international companies (IOCs) were engaged in exploring hydrocarbon resources in the country. Many facilities were given to them without guessing their consequences. Many analysts observed that foreign companies were getting scopes to dictate policies allegedly by creating conflicts with the people's interest due to the lax foreign direct investment (FDI) governance in the energy sector.
In fact, FDI in the energy sector is failing to ensure the anticipated technology transfer in the fields of energy exploration and power generation. International companies often force the authorities concerned to change the laws making those discriminatory to local companies. Besides, local companies have been put at a disadvantageous position due to tax-breaks offered to foreign companies in the energy sector. This has also made the thresholds fixed by the government for a project unreachable on the part of the local companies.
With the fast depletion of gas reserves and if new reserves are not found, Bangladesh is likely to face acute energy crisis after 2015. The situation has gone to such an extent that all concerned seem to have accepted the likely devastating effect of the gas supply crunch on the country's economy as a fait accompli. In fact, gas crisis is creating a snow-balling effect on the country's economy, as hundreds of factories are yet to start operation and many power plants remain idle, hindering the industrial growth of the country.
Unless BAPEX makes major stride for exploring gas in Netrokona-Sunamganj belt early next year, chances of overcoming the gas crisis are very slim. Magnama and Hatiya structures have reportedly a large presence of gas as described by Cairn after conducting 3D survey there. The situation demands extensive exploration on both onshore and offshore blocks in the wake of soaring gas crunch, caused mainly by lack of drilling in prospective fields. Harnessing hydrocarbon along with beefing up power generation is of crucial importance at this critical time of huge energy crunch.
A radical change is, indeed, needed in the energy sector. Otherwise, energy security will be difficult to be ensured. The sector also needs to be free from corruption. With very little resources, the country has already lost a lot due to widespread malpractice in the sector.
szkhan@dhaka.net
Energy security under threat
Shahiduzzaman Khan | Published: December 05, 2013 00:00:00 | Updated: November 30, 2025 06:01:00
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