Petrobangla and the indigenous natural gas and coal resources of Bangladesh
Tuesday, 13 April 2010
Prof. Dr. Md. Hossain Monsur
The current statutory basis for Petrobangla is the Bangladesh Oil, Gas and Mineral Corporation Ordinance, 1985 which reorganised Petrobangla as a statutory corporation to carry out the purposes of the Ordinance. Section-9 of the Ordinance specifies the functions of the Petrobangla. It's Sections 10 and 10A of the ordinance permits Petrobangla to form subsidiary companies for exploration and exploitation of oil, gas and mineral resources and to hold shares to any company formed for this purpose.
Pursuant to these provisions Petrobangla now has one exploration and production company named Bangladesh Petroleum Exploration and Production Company (BAPEX), two production companies namely Bangladesh Gas Fields Company Limited (BGFCL) and Sylhet Gas Field Limited (SGFL) and four gas distribution companies named as Titas Gas Transmission & Distribution Company (TGTDCL), Bakhrabad Gas Systems Limited (BGSQ, Jalalabad Gas Transmission & Distribution Systems Limited (JGTDSL) and Paschimanchal Gas Company Limited (PGCL).
Two other companies are the Gas Transmission Company Limited (GTCQ functioning as the national grid gas carrier to the distribution companies and Rupantarita Prakritik Gas Company Limited (RPGCL) which is a NGL processing and CNG marketing company. It is to be mentioned here that two more gas distribution are in the formation stage which are named as Karnaphuli Gas Distribution Company Limited (KGDCL) and Sundarban Gas Distribution Company Limited (SGCL).
At present, Petrobangla, the Bangladesh Oil, Gas and Mineral Corporation is empowered and entrusted by an Ordinance of the Government of the Peoples' Republic of Bangladesh (GOB) to perform the following:
l Exploration and development of the oil, gas and mineral resources as per the policies of the GOB.
l Coordinate, plan and supervise the activities of 11 subordinate companies.
l Overall control and coordination of the production, transmission and 'Marketing of gas, condensate, CNG, oil and mineral resources produced in the country.
l Conduct necessary research required in oil, gas and mineral exploration.
l Enter into Production Sharing Contracts (PSC) with International Oil Companies for exploration and development of oil and gas and to supervise, monitor and coordinate the activities under the signed PSCs.
lImplement important projects to develop the gas and mineral sector with the annual government fund and assistance's provided by the friendly countries and international development partners/organisations.
l Any other functions and responsibilities as directed by the government from time to time.
l The Board of Directors of Petrobangla is the policy making and managing body of the Corporation, with five full-time Directors and Directors from various Ministries. The Corporation is under the administrative control of the Energy and Mineral Resources Division (EMRD) of the Ministry of Power, Energy and Mineral Resources. It has also close relationship, through EMRD, with Ministry of Finance and Ministry of Planning for its development programs. There is also active relationship with numerous functional bodies such as, National Board of Revenue, Department of Explosives, and Department of Environment for specific work functions. The activities of the Corporation is reviewed and examined by the Public Accounts Committee and the Parliamentary Standing Committee.
Functions of Petrobangla
companies at a glance
l Bangladesh Petroleum Exploration & Production Company Ltd. mandated for oil and gas exploration and production.
l Bangladesh Gas Fields Company Ltd. mandated for oil and gas production.
l Sylhet Gas Fields Ltd. mandated for oil and gas production
l Gas Transmission Company Ltd. mandated for gas production transmission
l Titas Gas Transmission and Distribution Company Ltd. mandated for gas distribution
l Bakhrabad Gas Systems Ltd. mandated for gas distribution
l Jalalabad Gas Transmission & Distribution System Ltd. mandated for gas distribution
l Paschimanchal Gas Company Ltd. mandated for gas distribution
l Karnaphuli Gas Distribution Company Limited (KGDCL) and Sundarban Gas Distribution Company Limited (SGCL), both are the new companies under formation to deal with gas distribution.
l Rupantarita Prakritik Gas Company Ltd. mandated mainly for distribution of CNG, LPG including installation of CNG refueling station and CNG workshop establishment.
l Barapukuria Coal Mining Company Ltd. mandated for Coal mining at Barapukuria, which started production in September 2005 with the targeted capacity of 10.00 Iakh metric tons per year. Out of this targeted production, about 7.00 Iakh metric tons of coal per year will be used in the Barapukuria thermal power plant (2 x 125 MW) and remaining 3.00 lakh metric tons of coal will be locally used particularly by the brickfields, steel mills, tea-estate and other industries.
l Madhapara Granite Mining Company Ltd. mandated for hardrock/granite mining at Madhapara, which started production in May, 2007 with the targeted capacity of 16.50 lakh metric tons per year (5,500 tons per day).
Gas reserves of Bangladesh and
its demand-supply scenario
Presently, Bangladesh is heavily dependent on fossil fuel i.e. indigenous natural gas but as of recent studies the country is likely to be unable to sustain so dependency for long due to limitation of proven gas reserve. As an imperative we have to find the alternatives. In Bangladesh, natural gas is one of the important sources of energy that accounts for 75% of the commercial energy of the country. Till now 23 gas fields have been discovered in the country. The estimated recoverable proved and probable (P] + P2) reserve of the 23 gas fields is 21.05 TCF. Out of which, as of June 2009, a total of 8.37 TCF gas has already been produced and as such the left over proved and probable (PI + P2) recoverable reserve is 12.68 TCF. The probable (P2) reserve needs to be converted into proved reserve (PI) through further appraisal/development drilling program for effective gas based forward planning,
Bangladesh is basically an energy deficit country. As far as the current gas reserve is concerned, proved reserve is sufficient up to the year 2011. Thereafter, if probable reserve could be converted into proved reserve, it is estimated to be sufficient up to the year 2015. Further to that, if probable and possible reserves could be converted into proved reserve then it is assumed to be sufficient up to the year 2019. Even, if the projected exploration ventures do not yield significant positive results or existing gas fields fail to prove presently estimated reserve, the deficit in supply might be felt earlier. Subsequently, the country is likely to encounter a net deficit in gas supply from its own reserve if significant gas discovery cannot be made to enhance the existing reserve base.
Bangladesh would need 20-25 TCF additional gases by 2025 to keep up its GDP growth of 7%. Therefore, Bangladesh may have to think about import of gas if significant gas discovery cannot be made. Keeping this in view, the effort of increasing gas reserves has been continuing at the end of Petrobangla. Since there have been limitations in the gas reserves and future exploration of gas is always subject to many conditions, therefore, installation of future gas-fired power plants deserves dual and/or coal/liquid fuel provisions.
Presently in the FY2009-1 0 the average daily gas demand is planned to be 2,000 MMCFD and it is expected to increase this daily average gas demand upto 4,500 MMCFD in the FY 2019-20, Therefore, in Bangladesh, it has become extremely important to explore and develop new gas fields to meet the rapidly increasing demand of gas. To intensify exploration activities, the whole country was divided into 23 acreage blocks in the year 1988 and was opened for foreign investments. Through two bidding rounds held in 1993 and 1997, 10 Production Sharing Contracts (PSCS) were signed with a number of International Oil Companies (IOCs) for 12 acreage blocks. Out of these, 2 PSCs have already expired. Currently 8 PSCs are active in 10 acreage blocks. Beside this, offshore area of the country has been divided into 28 new blocks and an international tender was floated by the Government in February 2008 to start exploration activities in offshore areas under Production Sharing Contract. In response seven IOCs have submitted bids for 15 blocks. At present two IOCs have been selected for PSCs for three blocks where negotiation is going on.
The People's Republic of Bangladesh has been prioritising the development of indigenous natural gas resource with the view to achieving its PRSP and MDG goals through the socio-economic development of the country. At present power and fertiliser along with some other industries in the country directly or indirectly depend on this valuable resource. The present government has also visioned to ensure energy security by the year 2021, where gas as the primary energy source, would contribute a lot in achieving the target of this government's vision.
LPG, NGL, LNG & Condensate
With a view of reducing the import of fuel along with producing pollution-free fuel, an LPG plant was installed at Kailashtila in Sylhet in the year 1998. In November 2007 another NGL/ Condensate fractionation plant has been installed and commissioned at the same premises. Both the plants are producing sulphur and lead free and environment friendly quality LPG and Motor Spirit (Petrol) and HSD through the pr cessing of NGL and condensate respectively. It is to be noted that the capacity of both the plants for processing of NGL and Condensate are 175 M TNGL and 110 MT Condensate and from which 62 MT LPG, 270,000 Liter MS and 43,000 LitreHSD can be produced per day. But due to the shortage of raw materials 16 MT LPG, 102,000 litre MS and 20,000 litre HSD are being produced per day.
Condensate produced from the gas fields of Sylhet region are being transported to the Ashugonj. The supplied condensate is stored at Ashugonj storage tank and then delivered to the ship of BPC for carrying it to the Eastern Refinery Ltd. for processing. Initially condensate receiving and delivery quantity was 5-6 million litre per month. Now this quantity has reached up to 22 -25 million litre.
Vehicle conversion to Compressed Natural Gas (CNG) is being carried on and promotion of this mode of fuel is being encouraged.
Before using CNG, the uncontrolled emission of motor vehicles especially from two stroke three-wheeler baby taxis and diesel buses
was a major cause for air pollution. in urban areas specially Dhaka City. There was poor visibility due to air pollution in many areas of Dhaka city. Eye irritation, respiratory illness, cardio vascular diseases were common phenomenon to city dwellers.
Natural gas of Bangladesh consists of typically more than 96 per cent methane and practically contains no sulfur. By raising the usage of CNG substantial improvement in air quality is observed in urban areas.
CNG stations are consuming approximately 67.24 MMCM gas monthly, which is equivalent to more than 8.00 crore litres of petrol. Thereby Government is saving foreign exchange worth Tk. 7,500 crore per year in fuel import. The numbers of CNG run vehicles are increasing day by day for the positive initiatives taken by the Government. The rate of air pollution has been reduced remarkably due to widespread use of CNG. In 2001-2002 the number of CNG run vehicles were 6,734 and these numberhas reached to 1,64,128 up to June 2009.
Coal
In Bangladesh, the reserve of coal is about 2,700 million tones in five coal fields so far discovered, namely Barapukuria, Khalashpir, Phulbari, Jamalgonj and Dighipara which is equivalent to about 37 tcf gas. So far, only one field, i.e. Barapukuria, has been developed under a Chinese supplier's credit. Commercial production of Barapukuria coal mine commenced from 10 September 2005 with the targeted capacity of 1.00 million metric ton per year, but till now that targeted capacity cannot be achieved due to some constraint/limitation. During FY 2008-09 a total of 0.86 million metric ton of coal was extracted from the coal mine. Most of Coal is being used in 2x125 MW power plant and small portion are being used in Coal based industries.
By achieving the full-targeted capacity the coal will be locally used particularly in the brickfields, steel mills, tea-estate and other industries and will have an impact of reducing deforestation. It is mentioned here that from inception to June 2009, about 2.40 million Metric ton Coal was produced.
Some possible areas of co-operation by the ICC members
To keep the GoB's developing efforts in achieving its socio-economic target, both public and private or joint-venture investment will be encouraged in the downstream activities in the oil, gas & mineral sector. -There are some possible areas of co-operation in the oil, gas & mineral sector of Bangladesh are mentioned below:
l As of the country's present gas transmission network we are yet to construct gas transmission and distribution pipelines over the remaining 50% areas of the country. Significant investment in the transmission sector is essential, most immediately around pigging of the existing pipeline system to improve throughput and check the quality of the infrastructure, and then addition of compression to increase the capacity of the system. In total an investment requirement of US$ 1.3 billion was identified in the transmission sector over the period of 2025, which was defined in the Gas Sector Master Plan.
l Bangladesh encourages Direct Foreign Investment to enhance the industrialisation of the country. After opening of the Bangabandhu Bridge, gas pipeline network has been expanded in the western zone and further network will be expanded up to Rajshahi & Khulna districts by 2011/12 under ADB funded Gas Transmission & Development Project. Public/private entrepreneurs may participate to set-up gas-based industries like cement factory, fertiliser factory, petrochemical complex, etc. in the western & south-western part of Bangladesh.
In Bangladesh only 10% to 12% of the total population is enjoying gas facilities for their domestic use, the remaining 88% to 90% people would have felt their needs for LPG usage. Presently country's LPG demand is estimated at around 0.30 million MT.
Whereas only 10% i.e. 30,000 MT of LPG is being produced in the public sector and about 20,000 MT is imported by the private sector. Thus to meet the country's present estimated LPG demand, it needs additional 0.25 million MT of LPG for the country. This LPG demand is tremendously increasing day-by-day.
Alongside to the above, industries particularly in the south-eastern part of the country are still suffering the deficit of their required gas both in the private and public sectors. Therefore, present and future growing industries are demanding immediate and earnest need of LNG, and it is believed to have a promising and profitable international LNG market in Bangladesh. In view of the above, Private entrepreneurs may initiate to look for the prospects of businesses and bilateral co-operations in the energy sector, particularly in regard to the LNG and LPG demand in Bangladesh. Various international Road Shows have been launched to attract entrepreneur to invest in the LNG sector. It has a good market in Bangladesh. An overview with estimated cost & time for possible LNG marketing in Bangladesh has been furnished below:
LNG FSRU (on lease/own basis): Fast Track
1. Estimated Time 18 months
2. Cost depending on ship size for 130k to 200k vessel is USD 80m to USID 120m
3. Cost for double mooring jetty is USID 50m
4. Other project costs USID I I Om
5. Total project cost USID 280m (approx.)
For Permanent LNG Terminal (Estimated Time 36 months)
l Permanent infrastructure for mooring jetty, LNG receiving terminal, short plant, regasification unit, and necessary send out facilities will cost about USD 700m to 800m.
l LNG cost for 3.80 to 4.00 Mtpa @ USD7.00 is USID 109m - 110m (For gas equivalent @500mmscfd)
Coal deposits of North-Western part of the country may be the best alternate source of energy. Investors may come up for investment in coal mines and coal based industries.
Though Bangladesh has also prospect of coal bed methane in some of the discovered coal fields, but the country to achieve modern technology for coal mine as well as extraction of coal bed methane and as such, it is looking for the international co-operation for such mining activities. Moreover, possible prospect of gasification of coal deposits and installation of mine-mouth power plants deserve to be taken into consideration. Investors may come up for investment in such coal mines for extraction of gas from coal or set up a power plant in mine mouth to utilise such gases from coal bed.
(The writer is Chairman, Petrobangla)
The current statutory basis for Petrobangla is the Bangladesh Oil, Gas and Mineral Corporation Ordinance, 1985 which reorganised Petrobangla as a statutory corporation to carry out the purposes of the Ordinance. Section-9 of the Ordinance specifies the functions of the Petrobangla. It's Sections 10 and 10A of the ordinance permits Petrobangla to form subsidiary companies for exploration and exploitation of oil, gas and mineral resources and to hold shares to any company formed for this purpose.
Pursuant to these provisions Petrobangla now has one exploration and production company named Bangladesh Petroleum Exploration and Production Company (BAPEX), two production companies namely Bangladesh Gas Fields Company Limited (BGFCL) and Sylhet Gas Field Limited (SGFL) and four gas distribution companies named as Titas Gas Transmission & Distribution Company (TGTDCL), Bakhrabad Gas Systems Limited (BGSQ, Jalalabad Gas Transmission & Distribution Systems Limited (JGTDSL) and Paschimanchal Gas Company Limited (PGCL).
Two other companies are the Gas Transmission Company Limited (GTCQ functioning as the national grid gas carrier to the distribution companies and Rupantarita Prakritik Gas Company Limited (RPGCL) which is a NGL processing and CNG marketing company. It is to be mentioned here that two more gas distribution are in the formation stage which are named as Karnaphuli Gas Distribution Company Limited (KGDCL) and Sundarban Gas Distribution Company Limited (SGCL).
At present, Petrobangla, the Bangladesh Oil, Gas and Mineral Corporation is empowered and entrusted by an Ordinance of the Government of the Peoples' Republic of Bangladesh (GOB) to perform the following:
l Exploration and development of the oil, gas and mineral resources as per the policies of the GOB.
l Coordinate, plan and supervise the activities of 11 subordinate companies.
l Overall control and coordination of the production, transmission and 'Marketing of gas, condensate, CNG, oil and mineral resources produced in the country.
l Conduct necessary research required in oil, gas and mineral exploration.
l Enter into Production Sharing Contracts (PSC) with International Oil Companies for exploration and development of oil and gas and to supervise, monitor and coordinate the activities under the signed PSCs.
lImplement important projects to develop the gas and mineral sector with the annual government fund and assistance's provided by the friendly countries and international development partners/organisations.
l Any other functions and responsibilities as directed by the government from time to time.
l The Board of Directors of Petrobangla is the policy making and managing body of the Corporation, with five full-time Directors and Directors from various Ministries. The Corporation is under the administrative control of the Energy and Mineral Resources Division (EMRD) of the Ministry of Power, Energy and Mineral Resources. It has also close relationship, through EMRD, with Ministry of Finance and Ministry of Planning for its development programs. There is also active relationship with numerous functional bodies such as, National Board of Revenue, Department of Explosives, and Department of Environment for specific work functions. The activities of the Corporation is reviewed and examined by the Public Accounts Committee and the Parliamentary Standing Committee.
Functions of Petrobangla
companies at a glance
l Bangladesh Petroleum Exploration & Production Company Ltd. mandated for oil and gas exploration and production.
l Bangladesh Gas Fields Company Ltd. mandated for oil and gas production.
l Sylhet Gas Fields Ltd. mandated for oil and gas production
l Gas Transmission Company Ltd. mandated for gas production transmission
l Titas Gas Transmission and Distribution Company Ltd. mandated for gas distribution
l Bakhrabad Gas Systems Ltd. mandated for gas distribution
l Jalalabad Gas Transmission & Distribution System Ltd. mandated for gas distribution
l Paschimanchal Gas Company Ltd. mandated for gas distribution
l Karnaphuli Gas Distribution Company Limited (KGDCL) and Sundarban Gas Distribution Company Limited (SGCL), both are the new companies under formation to deal with gas distribution.
l Rupantarita Prakritik Gas Company Ltd. mandated mainly for distribution of CNG, LPG including installation of CNG refueling station and CNG workshop establishment.
l Barapukuria Coal Mining Company Ltd. mandated for Coal mining at Barapukuria, which started production in September 2005 with the targeted capacity of 10.00 Iakh metric tons per year. Out of this targeted production, about 7.00 Iakh metric tons of coal per year will be used in the Barapukuria thermal power plant (2 x 125 MW) and remaining 3.00 lakh metric tons of coal will be locally used particularly by the brickfields, steel mills, tea-estate and other industries.
l Madhapara Granite Mining Company Ltd. mandated for hardrock/granite mining at Madhapara, which started production in May, 2007 with the targeted capacity of 16.50 lakh metric tons per year (5,500 tons per day).
Gas reserves of Bangladesh and
its demand-supply scenario
Presently, Bangladesh is heavily dependent on fossil fuel i.e. indigenous natural gas but as of recent studies the country is likely to be unable to sustain so dependency for long due to limitation of proven gas reserve. As an imperative we have to find the alternatives. In Bangladesh, natural gas is one of the important sources of energy that accounts for 75% of the commercial energy of the country. Till now 23 gas fields have been discovered in the country. The estimated recoverable proved and probable (P] + P2) reserve of the 23 gas fields is 21.05 TCF. Out of which, as of June 2009, a total of 8.37 TCF gas has already been produced and as such the left over proved and probable (PI + P2) recoverable reserve is 12.68 TCF. The probable (P2) reserve needs to be converted into proved reserve (PI) through further appraisal/development drilling program for effective gas based forward planning,
Bangladesh is basically an energy deficit country. As far as the current gas reserve is concerned, proved reserve is sufficient up to the year 2011. Thereafter, if probable reserve could be converted into proved reserve, it is estimated to be sufficient up to the year 2015. Further to that, if probable and possible reserves could be converted into proved reserve then it is assumed to be sufficient up to the year 2019. Even, if the projected exploration ventures do not yield significant positive results or existing gas fields fail to prove presently estimated reserve, the deficit in supply might be felt earlier. Subsequently, the country is likely to encounter a net deficit in gas supply from its own reserve if significant gas discovery cannot be made to enhance the existing reserve base.
Bangladesh would need 20-25 TCF additional gases by 2025 to keep up its GDP growth of 7%. Therefore, Bangladesh may have to think about import of gas if significant gas discovery cannot be made. Keeping this in view, the effort of increasing gas reserves has been continuing at the end of Petrobangla. Since there have been limitations in the gas reserves and future exploration of gas is always subject to many conditions, therefore, installation of future gas-fired power plants deserves dual and/or coal/liquid fuel provisions.
Presently in the FY2009-1 0 the average daily gas demand is planned to be 2,000 MMCFD and it is expected to increase this daily average gas demand upto 4,500 MMCFD in the FY 2019-20, Therefore, in Bangladesh, it has become extremely important to explore and develop new gas fields to meet the rapidly increasing demand of gas. To intensify exploration activities, the whole country was divided into 23 acreage blocks in the year 1988 and was opened for foreign investments. Through two bidding rounds held in 1993 and 1997, 10 Production Sharing Contracts (PSCS) were signed with a number of International Oil Companies (IOCs) for 12 acreage blocks. Out of these, 2 PSCs have already expired. Currently 8 PSCs are active in 10 acreage blocks. Beside this, offshore area of the country has been divided into 28 new blocks and an international tender was floated by the Government in February 2008 to start exploration activities in offshore areas under Production Sharing Contract. In response seven IOCs have submitted bids for 15 blocks. At present two IOCs have been selected for PSCs for three blocks where negotiation is going on.
The People's Republic of Bangladesh has been prioritising the development of indigenous natural gas resource with the view to achieving its PRSP and MDG goals through the socio-economic development of the country. At present power and fertiliser along with some other industries in the country directly or indirectly depend on this valuable resource. The present government has also visioned to ensure energy security by the year 2021, where gas as the primary energy source, would contribute a lot in achieving the target of this government's vision.
LPG, NGL, LNG & Condensate
With a view of reducing the import of fuel along with producing pollution-free fuel, an LPG plant was installed at Kailashtila in Sylhet in the year 1998. In November 2007 another NGL/ Condensate fractionation plant has been installed and commissioned at the same premises. Both the plants are producing sulphur and lead free and environment friendly quality LPG and Motor Spirit (Petrol) and HSD through the pr cessing of NGL and condensate respectively. It is to be noted that the capacity of both the plants for processing of NGL and Condensate are 175 M TNGL and 110 MT Condensate and from which 62 MT LPG, 270,000 Liter MS and 43,000 LitreHSD can be produced per day. But due to the shortage of raw materials 16 MT LPG, 102,000 litre MS and 20,000 litre HSD are being produced per day.
Condensate produced from the gas fields of Sylhet region are being transported to the Ashugonj. The supplied condensate is stored at Ashugonj storage tank and then delivered to the ship of BPC for carrying it to the Eastern Refinery Ltd. for processing. Initially condensate receiving and delivery quantity was 5-6 million litre per month. Now this quantity has reached up to 22 -25 million litre.
Vehicle conversion to Compressed Natural Gas (CNG) is being carried on and promotion of this mode of fuel is being encouraged.
Before using CNG, the uncontrolled emission of motor vehicles especially from two stroke three-wheeler baby taxis and diesel buses
was a major cause for air pollution. in urban areas specially Dhaka City. There was poor visibility due to air pollution in many areas of Dhaka city. Eye irritation, respiratory illness, cardio vascular diseases were common phenomenon to city dwellers.
Natural gas of Bangladesh consists of typically more than 96 per cent methane and practically contains no sulfur. By raising the usage of CNG substantial improvement in air quality is observed in urban areas.
CNG stations are consuming approximately 67.24 MMCM gas monthly, which is equivalent to more than 8.00 crore litres of petrol. Thereby Government is saving foreign exchange worth Tk. 7,500 crore per year in fuel import. The numbers of CNG run vehicles are increasing day by day for the positive initiatives taken by the Government. The rate of air pollution has been reduced remarkably due to widespread use of CNG. In 2001-2002 the number of CNG run vehicles were 6,734 and these numberhas reached to 1,64,128 up to June 2009.
Coal
In Bangladesh, the reserve of coal is about 2,700 million tones in five coal fields so far discovered, namely Barapukuria, Khalashpir, Phulbari, Jamalgonj and Dighipara which is equivalent to about 37 tcf gas. So far, only one field, i.e. Barapukuria, has been developed under a Chinese supplier's credit. Commercial production of Barapukuria coal mine commenced from 10 September 2005 with the targeted capacity of 1.00 million metric ton per year, but till now that targeted capacity cannot be achieved due to some constraint/limitation. During FY 2008-09 a total of 0.86 million metric ton of coal was extracted from the coal mine. Most of Coal is being used in 2x125 MW power plant and small portion are being used in Coal based industries.
By achieving the full-targeted capacity the coal will be locally used particularly in the brickfields, steel mills, tea-estate and other industries and will have an impact of reducing deforestation. It is mentioned here that from inception to June 2009, about 2.40 million Metric ton Coal was produced.
Some possible areas of co-operation by the ICC members
To keep the GoB's developing efforts in achieving its socio-economic target, both public and private or joint-venture investment will be encouraged in the downstream activities in the oil, gas & mineral sector. -There are some possible areas of co-operation in the oil, gas & mineral sector of Bangladesh are mentioned below:
l As of the country's present gas transmission network we are yet to construct gas transmission and distribution pipelines over the remaining 50% areas of the country. Significant investment in the transmission sector is essential, most immediately around pigging of the existing pipeline system to improve throughput and check the quality of the infrastructure, and then addition of compression to increase the capacity of the system. In total an investment requirement of US$ 1.3 billion was identified in the transmission sector over the period of 2025, which was defined in the Gas Sector Master Plan.
l Bangladesh encourages Direct Foreign Investment to enhance the industrialisation of the country. After opening of the Bangabandhu Bridge, gas pipeline network has been expanded in the western zone and further network will be expanded up to Rajshahi & Khulna districts by 2011/12 under ADB funded Gas Transmission & Development Project. Public/private entrepreneurs may participate to set-up gas-based industries like cement factory, fertiliser factory, petrochemical complex, etc. in the western & south-western part of Bangladesh.
In Bangladesh only 10% to 12% of the total population is enjoying gas facilities for their domestic use, the remaining 88% to 90% people would have felt their needs for LPG usage. Presently country's LPG demand is estimated at around 0.30 million MT.
Whereas only 10% i.e. 30,000 MT of LPG is being produced in the public sector and about 20,000 MT is imported by the private sector. Thus to meet the country's present estimated LPG demand, it needs additional 0.25 million MT of LPG for the country. This LPG demand is tremendously increasing day-by-day.
Alongside to the above, industries particularly in the south-eastern part of the country are still suffering the deficit of their required gas both in the private and public sectors. Therefore, present and future growing industries are demanding immediate and earnest need of LNG, and it is believed to have a promising and profitable international LNG market in Bangladesh. In view of the above, Private entrepreneurs may initiate to look for the prospects of businesses and bilateral co-operations in the energy sector, particularly in regard to the LNG and LPG demand in Bangladesh. Various international Road Shows have been launched to attract entrepreneur to invest in the LNG sector. It has a good market in Bangladesh. An overview with estimated cost & time for possible LNG marketing in Bangladesh has been furnished below:
LNG FSRU (on lease/own basis): Fast Track
1. Estimated Time 18 months
2. Cost depending on ship size for 130k to 200k vessel is USD 80m to USID 120m
3. Cost for double mooring jetty is USID 50m
4. Other project costs USID I I Om
5. Total project cost USID 280m (approx.)
For Permanent LNG Terminal (Estimated Time 36 months)
l Permanent infrastructure for mooring jetty, LNG receiving terminal, short plant, regasification unit, and necessary send out facilities will cost about USD 700m to 800m.
l LNG cost for 3.80 to 4.00 Mtpa @ USD7.00 is USID 109m - 110m (For gas equivalent @500mmscfd)
Coal deposits of North-Western part of the country may be the best alternate source of energy. Investors may come up for investment in coal mines and coal based industries.
Though Bangladesh has also prospect of coal bed methane in some of the discovered coal fields, but the country to achieve modern technology for coal mine as well as extraction of coal bed methane and as such, it is looking for the international co-operation for such mining activities. Moreover, possible prospect of gasification of coal deposits and installation of mine-mouth power plants deserve to be taken into consideration. Investors may come up for investment in such coal mines for extraction of gas from coal or set up a power plant in mine mouth to utilise such gases from coal bed.
(The writer is Chairman, Petrobangla)