The Financial Express

Gas crisis in Chattogram and an agency

Pankaj Dastider | Published: December 14, 2018 21:18:47

Gas crisis in Chattogram and an agency

Karnaphuli Gas Distribution Co Ltd (KGDCL), dedicated to supplying gas to the Chattogram region comprising Cox's Bazar, Rangamati, Bandarban, Khagrachhari and Chattogram, was always plagued by numerous problems. Gas supply has always remained a crying need for the people of Chattogram.

The domestic burners in most parts of Chattogram are running dry during day time due to a lack of gas. The situation remains unchanged even after the import of the liquefied natural gas (LNG) although supply has increased. The gas consumers -- numbering around 0.6 million in five districts under KGDCL, have been the worst sufferers of the gas crunch since 2000. They have all along been deprived of gas supply, be it under the Bakhrabad Gas Systems Ltd (BGSL) until 2010 or under the newly-formed distribution company KGDCL over the last nine years. The scenario remains the same as of today.   

The KGDCL is the outcome of a decade-long struggle against the stand of the BGSL bosses. The BGSL used to supply Bakhrabad gas to greater Chattogram until commercial operation of the newly-formed KGDCL.

Petrobangla, the state-owned corporation, argued that it had no plan to boost supply to Chattogram as it did not have any extra gas, though industrialists, investors, trade body leaders and domestic consumers called for taking steps to augment the gas supply in view of the depleting gas production. The businesses at that time had also urged the government to import fertiliser for agriculture and temporarily suspend gas supply to the KAFCO and CUFL, which use gas as a raw material, just to keep production flow in the industries uninterrupted until normalisation of the supply in the country. Many garment industries, mostly in the knitwear sector, were forced to shut down production units due to the gas crunch.

The initiative for formation of a separate gas distribution company considering the importance of the industrial hub and alleviating the sufferings of consumers of greater Chattogram started in 1994 following a resolution of the authorities concerned in this regard. But it was dropped again before the process started in 2002.

The movement gained speed with the active participation of the Chittagong Chamber of Commerce and Industry in association with political leaders of the region. They waged a massive movement in the beginning of 2004 for bringing the BGSL head office in Chattogram. They argued that the BGSL earned 90 per cent of its gas sale proceeds from Chattogram consumers but there cannot be any reason for keeping its head office in a rural area called Chapapur under Cumilla district.

Apart from getting less than half the required quantity of gas from the BGSL, the candidates for new gas connections from Chattogram had to wait for the approval of the head office at Chapapur for months to get a decision on the issue while those in Cumilla, Feni, Noakhali, Chandpur and Brahmanbaria districts received the required gas supply and new gas connections.

The industrial production plants, garment manufacturers and domestic consumers became frustrated over the problem that poses the biggest hurdle to economic progress of the country's commercial hub, Chattogram, that hosts the prime seaport with most of the major heavy industries, three export processing zones (EPZs) and many large industrial and economic zones under development.

Finally, the movement for shifting the BGSL head office from Chapapur ended in setting up a new distribution company for the Chattogram region by the end of the tenure of then BNP government.

In July 2010 commercial operation of the Karnaphuli Gas Distribution Company Limited started with the appointment of Sanwar Hossain Chowdhury as administrator of the company. The government promoted him to the post of managing director on September 08, 2010, Prime Minister Sheikh Hasina inaugurated the much-sought-after KGDCL for gas supply to Chattogram, Cox's Bazar, Rangamati, Khagrachhari and Bandarban.

The people of Chattogram were hopeful that the gas supply to the region would increase. Despite establishing the new company, the gas supply remained lower because the company was not getting the required gas from the national grid. Gas supply to Chattogram was hovering around 170-190 mmcfd, sometimes coming down lower, against the current demand for around 470 mmcfd.    

Industries set up at a cost of nearly Tk 40 billion (4,000 crore) could not go into production without supply connections. The gas distribution authority said there was a huge gap between gas production and demand. The new industries set up since 2009 remained out of new gas connections, bringing production in the running factories to a standstill. On the other hand, machinery installed in the new factories started getting out of operation.

Amid such a situation, the government decided, in principle, to import gas from other countries. But it underwent a long-drawn process involving import of LNG (liquefied natural gas), floating storage facilities and construction of an under-water gas pipeline for supply of the re-gasified LNG from the facilities in the island of Moheshkhali in the Bay of Bengal.

Bangladesh began receiving supply of LNG from August 18 last. Prior to opening of the terminal a problem occurred in the pipeline. The problem was fixed after some days. But the gas supply suffered another setback on November 03 as a technical difficulty cropped up in the underwater hydraulic valve connected to the floating terminal, known as FSRU (floating, storage and re-gasification unit). The RLNG supply to the country's maiden FSRU restarted on November 15 after a 12-day disruption through resolving the glitch.

The state-run Gas Transmission Company Ltd (GTCL) is now carrying out test operations of the Anwara-Fouzderhat transmission pipeline to initiate commercial operation by the end of November. As a result, gas supply across the country, especially in Dhaka and its adjoining areas, would improve significantly. Crossing the Karnaphuli River was the main hurdle for completing the construction of the 3.0-kilometre 42-inch diameter pipeline, which the GTCL has repaired recently.         

Gas supply to the Chattogram region was hovering around 160-170 million cubic feet a day (mmcfd) against an average demand for 350 mmcfd until August-end this year when imported LNG added to the gas supply. In Chattogram, the KGDCL currently supplies gas to 597,662 consumers. Of them, 593,574 consumers are households, 2,788 are commercial consumers and 1,045 industrial consumers. Admitting the acute crisis in Chattogram, a senior official at the KGDCL said that they were facing a serious challenge in continuing gas supply to domestic and industrial consumers for many years. It is going to be solved shortly with import of RLNG.

Chattogram has been suffering from a severe gas crisis since 2013. Manufacturers, garment industries and domestic consumers are extremely frustrated over the problem that poses the biggest hindrance to economic advancement in the country's commercial hub. Development work in the country's largest economic and industrial zone in Mirsarai and another major economic and industrial zone in Anwara is going on in full swing. Several hundred industries will be set up in the two zones with investment proposals worth several hundred billion US dollars from international investors.

Due to gas crunch, production has also suffered disruption in most of the readymade garment factories. The RMG-intensive areas in the city, major steel plants in Mirsarai and Sitakunda, factories of other sectors, including fertiliser and power plants in more than half a dozen heavy industry areas in the city's Kalurghat, Mohra, Nasirabad, Patenga and Oxygen belts suffered. The region is also suffering as the lone gas pipeline is not sufficient to meet the load of the increasing demand. Businesses of Chattogram have been stressing the construction of a second pipeline from Bakhrabad to Fouzderhat.


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