6 years ago

Industries outside EZs unlikely to get new gas line from next year

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New industries outside the country's economic zones (EZs) would hardly get piped natural gas connections from next year as the authorities have already started discouraging it.

Officials said the move was being considered due to supply shortage of gas, increased incidents of pilferages and a possibility of increasing the gas price in the domestic market next year due to the import of expensive LNG.

The market price would then be fixed by blending the prices of domestic natural gas and the imported LNG.

It also aims at ensuring smooth distribution systems, said one of the officials.

"We discourage piped gas connections to industries outside the EZs to ensure its optimum utilisation," state-run Petrobangla chairman Abul Mansur Md Faizullah told the FE Wednesday.

He said the industrial units in the EZs will get preference in getting gas connections as quality supply could be ensured in the production hubs, commensurate with the government's pledge to the prospective investors.

The domestic natural gas price is expected to increase from next year with the start of importing expensive LNG (liquefied natural gas) sometime in April, he said.

Currently, the government has been providing the gas connections to industries across the country subject to its availability, said a senior official at the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR).

He said new industries in the northern Sylhet region and the island district of Bhola were getting piped gas connections significantly due to availability of the resource there.

But the industries located in other parts of the country were facing difficulties in getting the connections, said the official.

The country's overall natural gas production is hovering at around 2,700 million cubic feet per day (mmcfd) against the demand for around 3,300 mmcfd, according to Petrobangla.

The government earlier stopped providing new piped gas connections to the households and commercial consumers due to short supply of gas.

The gas connection to industries was also suspended for three years from June 2009 to May 2012 under the government's gas rationing programme.

Since then the connections to industries remained open, but very few industries were able to get it, business people alleged, protesting the move to discourage connections to industries outside the EZs.

"The government should continue to provide connections to industries at least until completion of the EZs," said vice president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Md Muntakim Ashraf.

The government would be able to make ready only 15-20 EZs by 2019 out of its plan for developing 100 EZs, he said, suggesting continuation of gas connections to industries until the EZs.

When contacted, a senior official of Bangladesh Economic Zones Authority (BEZA) also echoed the same view, saying that developing some 25 EZs in both the public and private sectors would be possible and the EZs would be ready for use in phases within the next couple of years.

He, however, said that half a dozen EZs already remained in operation.

A senior official at Titas Gas Transmission and Distribution Company Ltd (TGTDCL) said the government has been discouraging gas connections outside the EZs to check pilferage.

Some 769,000 illegal connections were snapped across the country between January 2014 and May 2017, he said.

Of the total illegal gas connections, 768,836 were being used in households, 459 in commercial entities, 171 in industrial units and 40 in compressed natural gas (CNG) filling stations, he said.

Officials said Bangladesh would import around 1,400 mmcfd equivalent of LNG by December 2018 as its first import terminal is expected to be commissioned in April 2018, followed by the second one by October, 2018.

Petrobangla on Sept 25 inked the sales and purchase agreement (SPA) with Qatar's RasGas to buy 2.5 million tonnes per year of lean LNG over 15 years.

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