Govt approves Cairn's $6m plan to shore up gas supply from Sangu

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M Azizur Rahman
The government has approved the UK-based Cairn Energy's US$ 6.0 million investment plan to shore up gas supply from the country's lone offshore Sangu gas field near Chittagong, officials said.
"The company has been allowed to pump this investment to install a gas compressor in Sangu gas field by July 2009 next to augment and ensure uninterrupted gas supply until 2011," Petrobangla director on PSC (production sharing contract) M Muqtadir Ali told the FE Saturday.
It will also conduct well intervention programmes in Sangu gas field with this investment, he said.
Cairn's further works in Sangu gas field would help the country's energy-starving Chittagong region to a great extent, industry sources said.
He said scores of industrial units have already invested in their projects in and around the port city but could not start operation only due to lack of gas so far.
The UK firm submitted a proposal to install a compressor and conduct well intervention programme in Sangu gas field early this month after dropping its extensive exploration programme in the offshore Magnama and Hatiya structures.
Without this investment Sangu would have no commercially extractable gas beyond 2009, the company officials said.
The company has so far invested around $1.0 billion in Bangladesh and over half of the amount has been invested in Sangu gas field alone which is located some 20 kilometres off the Chittagong seashore.
Gas production from Sangu slumped to 44 million cubic feet a day (mmcfd) recently from its average production of 180 mmcfd during 2006, seriously affecting the supply situation throughout Chittagong.
Cairn discovered the Sangu gas field in 1996, from where production started in 1998.
Regarding Sangu's reserve, Cairn initially 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.
It said it could extract 200 mmcfd of gas per day from the field.
In its 2006 annual report, the company changed its reserve data drastically and said the recoverable gas was 247 Bcf.
And in August last it said there was only 14 billion cubic feet (Bcf) remaining reserves.
State-run Petrobangla became hesitant over the Cairn's announcement regarding Sangu reserves and asked it to clarify the issue, a senior Petrobangla official said.