Cairn to breathe life to sangu for one more year

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Commissioning of compressors in progress at Sangu Gas Terminal in Chittagong Wednesday. — File photo

S M Jahangir
Back from Chittagong
Cairn Energy is installing compressors at Sangu gas terminal in Chittagong, which will extend the economic life of its off-shore field and pave the way for supplying the fuel to the region for at least one year more.
"We are implementing a filed compression project at Sangu gas terminal for the sake of extending the life of the field by at least one year," Director Operations and Engineering of the Cairn Energy Companies in Bangladesh, Ian Wright told a group of newsmen at its Sangu operations site.
The process of installing a couple of mega compressors is on and their formal launching is expected to take place by July 1 next, he said, adding that the implementation of the compression project would cost US$ 6.1 million.
"Fabricated in Singapore, the specially designed compressors have already reached
Chittagong… Hopefully, the commissioning of the compressors will take place by the end of June," said Mr Ian.
The key objective of installing such compressors is to make the gas supply possible from the Sangu, the lone supplier of gas to Chittagong region -- for at least one year more.
Given the existing pressure and available reserve of gas, it is hardy possible for the Cairn to continue its gas supply beyond the end of 2011, as the availability of gas is expected to decline significantly by the time.
Currently, the Cairn is supplying around 50 million cubic feet per day (mmcfd) to the state-run Petrobangla for distributing the gas in Chittagong area.
"Continuation of gas supply at below the level of 23 mmcfd is not economically viable for us," said Mr Ian, adding that the ongoing compression project coupled with some other efforts will help keep the Sangu's gas production going at the level until December 2012.
The company had implanted a $4.6-million bypass pipeline in 2007 and a well intervention campaign project in 2008 for the sake of extending the life of Sangu gas filed, he added.
After the signing of the production sharing contract (PSC) with the Petrobangla in 2004 and subsequent discovery of gas at the off-shore Sangu field in 2006, the Cairn had started producing and supplying gas in 2008, he said.
The Cairn and its joint venture partners have already invested about $ 1.0 billion in Bangladesh, Mr Ian noted.
The recoverable reserve of gas in the Sangu filed is estimated at 481 billion cubic feet (bcf), out of which the Cairn has so far delivered around 452 bcf of gas to the Petrobangla.
ABM Siraj Uddowla, Director of Governmental and Public Affairs of Cairn Energy in Bangladesh, also said given the present operational status, it will not be possible for the company to run its operation in Bangladesh beyond 2012.
"Unless the company is engaged in new gas-related activities in the near future and the existing price is increased by the government, it will not be able to continue its operations with a production of less-than 23mmcd of gas," Mr Siraj said.
The Cairn has been selling gas to the Petrobangla at the rate of $ 2.9 per 1000 cubic feet, he said, adding that the production and operational costs of the off-shore gas field are nearly three times higher than that of other onshore fields in Bangladesh.

He, however, suggested that the government should immediately invite bids for the 3D survey of the existing off-shore gas blocks for the sake of meeting the country's growing demand for energy, as gas from the existing reserve, according to experts, will dry within the next 2012.
"If the bid is not invited by June 2009, the 3D survey in off-shore gas blocks will be delayed further for one more year, as the survey can be done in the bay over a period of not more than six months," he added.