Govt drops Begumganj gas field development
Sunday, 23 May 2010
M Azizur Rahman
The government has finally dropped the BNP initiated Tk 2.5 billion project to develop Begumganj gas field under a joint venture of three state-owned gas companies and supply the output to gas-starved Chittagong region, top government official said Saturday.
"We are not considering development of the Begumganj gas field now," state-owned Petrobangla Chairman Dr Hossain Monsur told the FE Saturday.
It would require a large amount of money to develop the field and bring gas to national grid as the field is located far from the grid, he said justifying the government move.
Fund constraints of concerned gas companies and the refusal of the National Board of Revenue (NBR) to exempt it from payment of supplementary duties and value added tax (VAT) also led to dropping of the much-hyped project, a senior energy ministry official said.
Officials said the BNP-led government initiated the project during late 2005 to divert Begumganj gas to energy-starved Chittagong region after establishing the country's first-ever joint venture of state-owned gas companies.
Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX), Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Company Ltd (SGFCL) had joined hands and signed a memorandum of understanding (MoU) to implement the unprecedented joint venture project.
The caretaker government also forwarded the project and the then energy ministry had approved a special tariff at Tk 109 per unit (1,000 cubic feet) for Begumganj gas to ensure its financially viability.
Petrobangla was then purchasing gas at Tk 7.0 per unit from state-run BAPEX
During the caretaker government regime the energy ministry also tried to pursue the NBR to exempt the Begamganj joint venture project from usual tariff.
Under the MoU signed by the joint venture partners in 2006, the Begumganj gas-field development was supposed to be completed in two phases at an estimated cost of Tk around 2.50 billion.
Each of the three companies would have equal shares in the venture.
The BGFCL and the SGFCL were to bear the cost of appraisal and development of the Begaumganj gas equally from their own coffers while BAPEX would be the working partner.
The BGFCL was supposed to be the operator and lead partner of Begumganj gas field.
Seventy per cent of the Begumganj income was planned for adjustment under cost recovery provision and the remaining 30 per cent to be divided among three partners.
At present SGFCL, BGFCL and BAPEX are separately producing gas from 13 gas fields with the combined gas production at around 920 million cubic feet per day (mmcfd), which is around 46 per cent of the overall production of 1980 mmcfd.
Begumganj gas field was discovered by Petrobangla in 1977 with a proven and probable gas reserve of 46.70 billion cubic feet (Bcf).
The BAPEX had drilled two wells in late 1970s and found the recoverable gas reserve of around 32.7 Bcf.
The government has finally dropped the BNP initiated Tk 2.5 billion project to develop Begumganj gas field under a joint venture of three state-owned gas companies and supply the output to gas-starved Chittagong region, top government official said Saturday.
"We are not considering development of the Begumganj gas field now," state-owned Petrobangla Chairman Dr Hossain Monsur told the FE Saturday.
It would require a large amount of money to develop the field and bring gas to national grid as the field is located far from the grid, he said justifying the government move.
Fund constraints of concerned gas companies and the refusal of the National Board of Revenue (NBR) to exempt it from payment of supplementary duties and value added tax (VAT) also led to dropping of the much-hyped project, a senior energy ministry official said.
Officials said the BNP-led government initiated the project during late 2005 to divert Begumganj gas to energy-starved Chittagong region after establishing the country's first-ever joint venture of state-owned gas companies.
Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX), Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Company Ltd (SGFCL) had joined hands and signed a memorandum of understanding (MoU) to implement the unprecedented joint venture project.
The caretaker government also forwarded the project and the then energy ministry had approved a special tariff at Tk 109 per unit (1,000 cubic feet) for Begumganj gas to ensure its financially viability.
Petrobangla was then purchasing gas at Tk 7.0 per unit from state-run BAPEX
During the caretaker government regime the energy ministry also tried to pursue the NBR to exempt the Begamganj joint venture project from usual tariff.
Under the MoU signed by the joint venture partners in 2006, the Begumganj gas-field development was supposed to be completed in two phases at an estimated cost of Tk around 2.50 billion.
Each of the three companies would have equal shares in the venture.
The BGFCL and the SGFCL were to bear the cost of appraisal and development of the Begaumganj gas equally from their own coffers while BAPEX would be the working partner.
The BGFCL was supposed to be the operator and lead partner of Begumganj gas field.
Seventy per cent of the Begumganj income was planned for adjustment under cost recovery provision and the remaining 30 per cent to be divided among three partners.
At present SGFCL, BGFCL and BAPEX are separately producing gas from 13 gas fields with the combined gas production at around 920 million cubic feet per day (mmcfd), which is around 46 per cent of the overall production of 1980 mmcfd.
Begumganj gas field was discovered by Petrobangla in 1977 with a proven and probable gas reserve of 46.70 billion cubic feet (Bcf).
The BAPEX had drilled two wells in late 1970s and found the recoverable gas reserve of around 32.7 Bcf.