Higher prices for gas from new fields likely

---

M Azizur Rahman
The government is set to fix higher gas prices for the gas fields to be explored under the forthcoming offshore bidding round in the Bay of Bengal to entice a significant number of international oil and gas exploration companies.
"The gas prices might not be less than US$4.0 per unit (1,000 cubic feet)," a senior Energy and Mineral Resources Division (EMRD) official told the FE.
He said the pricing formula for the gas fields under the new bidding round would follow the high sulfur fuel oil price of Singapore under which gas prices for a single unit would be over $4.0 mark.
The EMRD has already proposed such pricing formula in the model production-sharing contract (PSC) to be signed with the bid winning oil and gas exploration companies.
Currently the state-owned Petrobangla purchases gas at between $2.4 and $3.0 per unit from the international oil companies currently in operation in Bangladesh.
Petrobangla pays the highest price at around $3.0 per unit to purchase gas from the country's lone offshore Sangu gas field.
"An enhanced gas price for the new offshore gas fields has been proposed considering the soaring energy prices in the international market," the EMRD official said.
EMRD sources said the government will launch 'Bangladesh Offshore Bidding Round 2007' shortly to meet the growing gas demand across the country.
Petrobangla has already prepared all necessary documents for inviting the new bidding round, which are now awaiting vetting by the law ministry.
The EMRD has already dotted a total of 27 new offshore gas blocks in the Bay of Bengal for hydrocarbon exploration.
Of the new gas blocks, 20 were demarcated in the deep-sea while the remaining six are in shallow water in the Bay.
The areas of the shallow water gas blocks were pro-posed to be fixed between 5,000 square kilometres and 5,500 square kilometres each, while for the deep-sea gas blocks the areas were proposed to be 3,300 square kilometres each.
The government has, however, eight PSCs with the IOCs for 10 gas blocks across the country. If signed these PSCs in the first and second round biddings in 1993 and 1997 respectively after dividing the country into 23 blocks.