The Energy and Mineral Resources Division approached the Planning ministry to exempt five vital gas exploration and development projects from the mandatory third-party feasibility study requirement.
The government division reasoned that rapid exploration of gas will help to reduce dependency on imported liquefied natural gas (LNG).
The proposed five projects will ensure drilling several types of 13 wells, set to be implemented by the fiscal year 2028-29 starting in the next fiscal by the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla).
Currently, a feasibility study is mandatory for any project with an estimated cost of Tk500 million or over prior to approval of the project by the Executive Committee of the National Economic Council (ECNEC), according to the Planning Division's guidelines.
Mohammad Saiful Islam, secretary, Energy and Mineral Resources Division, recently sent a letter to the Planning secretary Iqbal Abdullah Harun, seeking the waver of feasibility studies for five projects to save money and time to explore gas.
Mohammad Saiful Islam said in his letter, under the government's directive to strengthen energy security, the Energy Division has planned 23 projects for fiscal years 2025-26 to 2028-29, including 15 well-drilling initiatives.
Among them, development project proposals (DPP) for five key projects have been outlined, featuring drilling at prominent locations such as Begumganj, Sundalpur, Kailashtila, and Titas Gas Field.
The experts from the private sector praised the initiative of exploring gas, surpassing the LNG import dependency policy adopted by the former Awami League government. However, they urged the government to ensure substantial precautionary measures prior to waver of feasibility study. Saiful Islam highlighted several challenges to comply the condition of feasibility studies for the projects of the Energy Division such as the limited expertise in the lack of established firms in Bangladesh. Their technical complexity bars them to convenient conduct feasibility studies for oil and gas projects.
He also said that, completing feasibility studies through third parties typically takes six-12 months and costs Tk 3-4 million per project.
The division noted that delays in initiating critical projects could lead to further declines in domestic gas production, jeopardising power generation, industrial operations, and fertiliser production, the letter revealed.
A recent meeting chaired by the advisor to the Ministry of Power, Energy, and Mineral Resources, decided to submit resubmit the proposal to the Planning Commission for reconsideration, according to the officials of the energy and mineral resources division. Earlier it sent a letter in this regard.
The Energy Division emphasised that past feasibility studies for similar projects were successfully conducted by technical committees, comprising experts from state entities like Petrobangla, BAPEX, and Sylhet Gas Field Limited.
The division's letter to the Planning ministry urged immediate exemption to ensure swift implementation of these projects, aligning with national interests to secure long-term energy supply and reduce dependence on expensive imports.
Professor M Shamsul Alam is the senior vice-president of Consumers Association of Bangladesh (CAB), said that the government should introduce immediate measures to explore gas and fuel to reduce dependency on high cost imported LNGs.
"Feasibility studies for some selected projects may be relaxed at a certain level, but not for each projects," he said adding that the proper body should ensure justification of the project with lowest cost and highest benefit in absence of the feasibility study.
"Feasibility study is mandatory to ensure standard practice in terms of cost, duration for any projects and relaxation from study may make difficult to ensure discipline for any project," said Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD).
He said that the floor of project cost may be relaxed for certain development projects but it should not be opened to ensure maximum results of projects.
He also said that a savings worth about Tk 4 million and time with a length of a year is not justified to relaxation of a feasibility study.
jahid.rn@gmail.com