Shahbazpur gas finally finds its commercial use

Mushfiqur Rahman The Bangladesh Power Development Board (BPDB) has signed an agreement with the Chinese company, China Chengda Engineering Company Ltd. for installation of a 225 megawatt power plant at Borhanuddin Upazila of Bhola district on April 09, 2013. As per the agreement, the company will have to complete construction of the simple-cycle gas-fired power plant unit (150 MW) and make it operational within 18 months and the combined-cycle power plant (75 MW) should start power generation within 27 months. The turn-key contract will be implemented to supply power from the plant to the national grid from October 2015. Petrobangla has given its consent for supplying gas to this plant from its Shahbazpur (Bhola) gas field. As reported, the total cost for the project was estimated at Tk 20.60 billion of which Islamic Development Bank would provide Tk 13.78 billion (under lease financing. From the Bangladesh government part, BPDB will provide Tk 938 million and Tk 5.88 billion will be given from the government fund. The Chinese contractor will get Tk 14.19 billion for successful completion of the 225MW combined-cycle power plant construction and commissioning as per the contract terms and conditions. The implementation of the gas-based power plant project in Bhola district has been long awaited as the available natural gas from the Shahbazpur gas field, which was discovered at a depth of 3,631 meters below the surface by the Bangladesh Petroleum Exploration Company (BAPEX) in 1994, could not be used commercially. The gas field started production from its first well in 2009. At this moment Shahbazpur gas field has two completed production wells and one of the wells can produce approximately 30 million cubic feet gas daily (mmcfd). With minor additional infrastructure building, the gas field cans nearly double its gas production within the shortest possible time. Currently the only 35MW rental power plant in operation in Bhola requires 8.0 mmcfd gas for the plant. With this new power plant to be constructed significant share of the gas production capacity of the Shahbazpur gas field would be utilised. The government has a plan for setting up of the power transmission lines to connect Borhanuddin power plant and Barisal through the 132/230KV transmission lines. Once the transmission infrastructures are built, the power generated in Bhola may come into the national grid. The Shahbazpur Gas Field has 650 billion cubic feet (Bcf) of (proven and probable) gas reserve and BAPEX estimated approximately 450 Bcf gas would be recoverable from the field. In 1997, UNOCAL, the international oil company, proposed to the government a package proposal titled 'Western Region Integrated Project (WRIP)'. The WRIP aimed at US $700 million investment for development of the Shahbazpur Gas Field along with the construction of 120km, 24-inch diameter gas transmission pipeline from Shahbazpur to Digholia (Khulna). The proposal also included construction of gas-fired power plants in Barisal, Bhola and in Khulna. UNOCAL projected more than 1.0 trillion cubic feet (Tcf) gas reserve in the Shahbazpur field and it planned to drill four development wells and setting up of a gas treatment plant so that within WRIP, a total of 500 MW power plant (one 100MW power plant at Bhola, one 100MW plant at Barisal and one 250-300MW power plant at Khulna) could get gas supply from Shahbazpur field. Initial survey for gas pipeline route was carried out for the project during 1997. But the then government finally decided not to go ahead with the WRIP project. Since then, several attempts of BAPEX for production and commercial marketing of gas from Shahbazpur field could not be accomplished (mainly due to the absence of industrial consumers in Bhola). In the meantime, BAPEX has invested approximately Tk 1.33 billion for development of the Shahbazpur gas field which includes among others the investment of Tk 150 million for construction of gas transmission and distribution networks. The Bhola district town, approximately 30 km away from the Shabazpur Gas Field, has been connected with a gas transmission pipeline and additional 22 km distribution pipelines for gas have been built for supplying gas to potential consumers. Despite repeated demands from the local people, the government did not proceed with domestic gas connections from the gas field. The lone commercial consumer of the Shahbajpur Gas field so far remains Venture Energy Limited which runs the 34.5MW gas-fired power plant burning 7-8 mmcfd gas. The power plant has been planning to enhance its capacity for 20 MW more power generation and it will then require 12-13 mmcfd gas supply for the plant operations. BAPEX has taken initiatives for installation of a gas processing plant with the objective of supplying 100 mmcfd gas from the Shahbazpur field. BAPEX also gave a contract to the Russian company GAZPROM for drilling two more wells at the Shahbazbur field at a cost of Tk 2.71 billion for production of gas. BAPEX expects that 100 mmcfd gas can be supplied within end 2014, provided the drilling wells and gas processing plants become operational. In addition, BAPEX has taken initiatives for carrying out a three-dimensional seismic survey programme next year in 600 sq. km area covering Borhanuddin Upazila and Bhola municipal town area. It is anticipated that the 3-D seismic survey would enable BAPEX for defining better the gas field structure and selecting locations for drilling wells. Experts believe that the 3-D seismic survey and more drilling of wells will help enhance recoverable gas reserves in the Shahbazpur gas field. The successful implementation of the 225MW combined-cycle gas fired power plant at Borhanuddin, Bhola will require approximately 35-37 mmcfd gas for its operation. The Venture Energy Power Plant with its 55 MW target production may consume 12-13 mmcfd gas. BAPEX is ready with its two drilled wells to supply the required gas for these two power plants. In the meantime, the additional two drilling wells with the help of GAZPROM will help BAPEX to produce nearly 100 mmcfd gas. Bhola will thus become a major contributor of energy for the region as well as for the country in the near future. Mushfiqur Rahman, a mining engineer, writes on energy and environmental issues. mushfiq41@yahoo.com