No hydrocarbon crisis beyond 2018!
Buoyed by the findings of a preliminary search, an Indian company is expected to drill an exploratory well in a shallow offshore block in the Bay of Bengal to discover hydrocarbons. The company -- ONGC Videsh Ltd (OVL) -- has moved to drill the well near Moheshkhali, according to a report this week.
The Indian firm was inspired by the results of two-dimensional (2D) seismic surveys it had carried out in two shallow-water bay blocks last year. Bangladesh currently reels from an acute natural gas crisis. The country's daily average output of fossil fuel is around 2,700 million cubic feet (mmcfd) as against a known demand for over 3,300 mmcfd.
The entire natural gas production comes from the country's onshore gas fields. So far, exploration in the bay for hydrocarbon failed to bring any fruitful result. Production from the Sangu, country's only offshore gas field, was suspended long ago due to its non-availability. Any fresh discovery of hydrocarbons is expected to boost the country's growing economy significantly.
The country's gas sector is, in fact, in disarray. For the past few years, gas connections to new industrial and commercial units have virtually remained suspended. Even though new gas connections resumed last year, the government is contemplating on stopping it again.
Bangladesh started facing natural gas crisis in 2009 with rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, compressed natural gas (CNG) filling stations and households.
In order to discover new gas fields, the government is also allowing the proposed joint venture company of Bangladesh Petroleum Exploration and Production Company (Bapex) and Russia's Gazprom to explore onshore as well as offshore waters of Bangladesh.
Crisis in the gas sector had actually originated from the practice of giving illegal connections from the very beginning by an unscrupulous section of officials and employees of gas distribution companies.
When the government decided not to give domestic connections any more, the giving illegal gas connections became a thriving business. Some musclemen, in connivance with a section of Titas Gas employees, earned a fortune by providing such connections. The Titas Gas failed to stop such practice. No appreciable measures were taken by the government to contain such evil practice.
At summer time, the daily demand reaches the peak of 3300 million cubic feet (cft). The gas distribution companies find it a challenging task to keep the consumers content with the available supply of 2,800 million cft, a shortfall of 500 million cft.
Despite efforts, it is not possible to overcome the huge shortfall of gas over a short period of time. Only supplies from new onshore and offshore gas blocks could improve the supplies to the consumers. Import of liquefied natural gas (LNG) which is now under study, could help the government in reducing the supply shortage.
Entrepreneurs are in real problems as they are unable to run their factories due to shortage of gas and electricity. They are operating their boilers buying gas from CNG pumps which increases the cost of production. Business leaders are demanding that the government ensure uninterrupted supply of gas and electricity to private sector for hastening the country's industrialisation.
On discovering hydrocarbon reserve, the government is reportedly planning to invest $200 million to $300 million in offshore exploration through state-run Bapex as the IOCs (international oil companies) are not interested in exploration in the wake of rise in cost of investment. Actually, the cost of investment in oil and gas exploration shot up in the wake of price crunch of natural gas following fuel oil prices on the international market.
Finance Minister AMA Muhith said recently there would be no gas crisis in Bangladesh after January 01, 2019 as the government had taken a number of steps that include setting up of gas terminal and import of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) to solve the nagging problem.
The minister pointed out that both the government and the private sector were working fast to build the gas terminal and hoped that import of LNG and LPG would become much easier by the end of 2018. More offshore and onshore gas deposits are also expected to be found.
All this indicates that the finance minister has some grounds to forecast that there would be no gas crisis after 2018. Let's pin our hope on his prediction and move forward for sustained growth of the country.