New gas finding kindles hopes

With Bangladesh's gas reserves being depleted fast, yesterday's announcement of discovery of the country’s 28th gas field at Zakiganj of Sylhet district carries special significance amid economic slowdown on the back of the deadly ongoing Covid-19 pandemic. The gas reserves in the new field are likely to be worth around Tk. 1,270 crore and the new finding took place four years after Bangladesh discovered its 27th gas field in Bheduria of Bhola in October 2017.

Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) found the country’s 28th gas field which is expected to produce 10mmcf gas per day. State Minister for Power, Energy and Mineral Resources Nasrul Hamid formally announced the discovery of the new gas field at a virtual seminar titled “Energy Security: Modern Context, Challenges & Way Forward” marking the National Energy Security Day on Monday.

The webinar was organized by Energy and Mineral Resources Division to observe August 9 as National Energy Security Day marking the historic decision of Father of the Nation Bangabandhu Sheikh Mujibur Rahman to take over 5 gas fields in Sylhet region from multinational Shell Oil Company in 1975.     

"The field will supply natural gas to the national grid with in next 12-13 years. The equivalent value of the total gas is at Tk 12.76b. The gas field has a reserve of 68bcf of gas,” said the state minister. 

Energy and Mineral Resource Division senior secretary Md Anisur Rahman said, “The government has a plan to drill three wells in coming days at the newly discovered field.” 

Bapex is now producing 146mmcfd of natural gas per day from its six gas fields, according to its managing director. The existing gas fields are currently producing around 2500mmcfd of natural gas daily.

Meanwhile, Sylhet Gas Fields Limited (SGFL) recently found a new reserve at the ninth well of Haripur Gas Field. On the discovery, SGFL General Manager (Operations) Pradip Kumar Biswas said they are now conducting drill stem test at the well. 

"After the trial run, production will be started from the level where the volume of reserve is good. We are hopeful about going for production this month," he said. Quoting the Development Project Proposal (DPP), he said the new well is expected to produce 188 barrels or 7 million cubic feet of natural gas per day.

The SGFL has awarded the well to Bangladesh Petroleum Exploration and Production Company Limited (Bapex) for drilling, he added. Bapex started drilling the well on October 1 last year and the new gas reserve was found at a depth of 1,998 meters underground on Monday evening, according to sources at the gas fields.

At present, the SGFL has under its umbrella five gas fields -- Haripur, Rashidpur, Chhatak, Kailashtilla, and Beanibazar.  However, the Chhatak Gas Field is currently abandoned.

Currently, Bapex is producing about 90 mmcf of gas per day from seven onshore gas fields - Saldanadi, Fenchuganj, Shahbazpur, Semutang, Sundulpur, Srikail and Begumganj. 

According to some estimates, Bangladesh has current gas reserves of between 7 Tcf and11 Tcf. The annual supply of local gas has been gradually decreasing from 0.969 Tcf in FY 2017 to 0.961 Tcf in FY 2019, and will decrease further in the coming years. It is estimated that the supply from existing reserves will come down to about 0.365 Tcf annually by 2030 and even less by 2035. By 2041. Bangladesh will probably see the last few bubbles of gas from the existing reserves before being depleted completely if new discoveries are not made.

Against the backdrop of the quick gas depletion, Bangladesh has started importing liquefied natural gas (LNG). Since late 2018, the shortfall of gas supply is being partly compensated through the import of LNG. But LNG is an expensive fuel and costs three times more than the local gas. It is envisaged that LNG will gradually take more and more share of the gas supply in Bangladesh before being the predominant mode of supply in the future. If that happens, the economy will be under pressure, having to live with a large annual LNG import bill in a fund-constrained country.

The government has a plan to increase LNG import at least by 1600 mmcfd to supply 3465 mmcfd annually by the FY 2023-24. The government is now able to supply 3107 mmcfd gas against the demand of around 4000 mmcfd to different sectors.

In the FY 2024-25, the LNG import will surge to 2350 mmcfd against the requirement of 4343 mmcfd of natural gas, according to a Petrobangla projection.  The demand of natural gas is predicted to reach 5092 mmcfd by 2041, of which, 3850 mmcfd will be met by import. “We have a plan to develop infrastructure to increase annual LNG import to 4000 mmcfd by FY2031-32,” said an official concerned.

Meanwhile, the government has decided to conduct a feasibility study on importing LNG through Mongla Port.

The ministry of power and energy has taken the decision to conduct the feasibility study in a meeting early this month.

The meeting also said the Petrobangla should scrutinise about setting up of a floating storage regasification unit (FSRU) at Moheskhali Island in Cox’s Bazar. The FSRU will supply 500 mmcfd of LNG by 2023.

Two FSRUs have already been installed in the island to process 675mmcfd of LNG against the capacity of 1000 mmcfd.

Besides, the Petrobangla is also working to import 500 mmcfd of LNG in two phases through cross-border negotiation with the Indian IOCL and H-Energy, said a ministry official. He added the Petrobangla has already made a presentation last month before the ministry in this regard.  The government also plans to install a third parallel pipeline from Matarbari to Moheskhali. This will be built to supply 1000 mmcfd of LNG from the land-based FSRU.

The government policymakers are worried about the strategy of importing costly LNG to meet supply shortage as the locally produced gas is depleting gradually.

This import of LNG needs Tk 6312 crore as subsidy to keep the price low in line with the local gas price as the import cost is $8-9 per unit against the price of local gas at $2.5-3 per unit.

Since the discovery of its first gas field in Sylhet in 1955, Bangladesh has so far found 28 gas fields with the yesterday's finding of gas at  Zakiganj in  Sylhet.