Present & Future prospects of Natural Gas in Bangladesh

Bangladesh has always been considered a natural gas rich country. It is largely available in the eastern part of the country extending from greater Sylhet down to greater Comilla, Noakhali and Chittagong. It has also been discovered offshore in the Bay of Bengal. Natural gas plays an important role in the country's economy. It is an environment friendly fuel, which undergoes clean and odorless combustion. It is widely used as fuel for domestic (cooking and heating), industrial (metallurgical, ceramic, glass, bread and biscuits, power stations, cement works, factory process steam boilers, etc) and agricultural (drying, heating, steam boilers) use. LIQUEFIED PETROLEUM GAS (LPG), LIQUEFIED NATURAL GAS (LNG), COMPRESSED NATURAL GAS (CNG) are obtained from natural gas and are used as fuels in domestic, industrial and agricultural applications. In chemical industries natural gas is used as feedstock for the manufacture of fertilizers, plastics, resins, rubbers, and various chemicals such as carbon black, detergents, ammonia, nitric acid, weed killers, etc. Natural gas from Bangladesh is very pure, with about 95% to 99% methane and almost no sulphur. The average compositions are 97.33% methane, 1.72-% ethane, 0.35% propane and 0.19% higher hydrocarbons. Gas in most of the fields is dry, but in a few fields it is wet, with considerable amounts of condensate, eg at Beanibazar (16 bbl/mmcfg), Jalalabad (15 bbl/mmcfg), and Kailashtila (13 bbl/mmcfg). The total condensate reserve in the country is estimated at about 65 million barrels.

GAS reserve of Bangladesh: In Bangladesh, natural gas is one of the important sources of energy that accounts for 75% of the commercial energy of the country. Till now 23 gas fields have been discovered in the country. The estimated recoverable proved and probable reserve of the 23 gas fields is 28 TCF. Out of which, as of June 2009, a total of 8.37 TCF gas has already been produced and as such the left over proved and probable recoverable reserve is 20 TCF. The probable reserve needs to be converted into proved reserve through further appraisal/development drilling program for effective gas based forward planning. Out of the 23 fields, two are offshore in the Bay of Bengal and the rest are located in the eastern onshore areas. The gas occurs in Miocene (5 to 24 million years before present)-Pliocene (2 to 5 million years before present) sandstone reservoirs at depths of about 1,000 to 3,500m below the surface. The discovered 23 gas fields are at Sylhet, Chhatak, Titas, Rashidpur, Kailastila, Habiganj, Bakhrabad, Semutang, Kutubdia, Begumganj, Kamta, Feni, Beanibazar, Fenchuganj, Jalalabad, Narsingdi, Meghna, Shahbazpur, Saldanadi, Sangu, Bibiyana Maulvi Bazar and Sundalpur. Most of the gasfields are located in and around the frontal fold belt of the Indo-Burman Ranges in the eastern part of the country.

Production & Marketing : Production and marketing of natural gas in Bangladesh started in 1960 with pipeline gas supply from Chattak gasfield to Chattak cement factory. In 1961, a second gasfield, Sylhet, was put under production to supply gas to Fenchuganj fertiliser factory. In 1961, the total gas produced was 3.5 billion cubic feet. Production and marketing of gas in the country has grown steadily ever since. By the end of 1998, the number of gasfields discovered reached 22, with 12 fields under production. In 1998, total production of natural gas in the country was 298 billion cubic feet. The present rate of gas production is about 1,000 million cubic feet per day. Immediately after the production of natural gas from the gasfields, it is necessary to have gas flowing through pipelines. Such pipelines are installed according to supply and demand. Transmission and distribution companies have been formed for the purpose. Bangladesh possesses an extensive and long-established gas network. An extensive pipeline network brings gas to consumers, including industrial, commercial and domestic users of natural gas. Among the industrial users of gas, power generation companies consume the major share of the total gas produced. In addition, fertiliser and cement factories, pulp and paper mills and other industries mainly located in the eastern and central parts of the country use natural gas.. Power generation and fertiliser production consumes about 80% of the natural gas produced at present. The sectorwise use of gas as a percentage of total gas consumed stands as follows: power (45%), fertiliser (35%), industrial, commercial and domestic (20%). The demand for natural gas in the country is increasing at a rate of 13.4% annually. Three transmission and distribution companies are currently supplying gas to three franchise areas (a) Titas Franchise Area (TFA), (b) Jalalabad Franchise Area (JFA) and (c) Bakhrabad Franchise Area (BFA). These three areas are separately responsible for supplying gas to - (a) TFA: Ashuganj Power Station, Zia Fertiliser Factory, Jamuna Fertiliser Factory, Ghorashal Urea Fertiliser Factory, Ghorashal Power Station, and Mymensingh, Kishoreganj, Netrokona, Jamalpur and Sherpur districts; (b) JFA: Kumargaon Power Station, Sylhet Paper and Pulp Mills, Chhatak Cement Factory, Ainpur Cement Factory, private sector cement factories, industrial, commercial, domestic and other consumers in Sylhet, Chhatak, Sunamganj districts and adjoining areas, Fenchuganj Power Station, Shahjalal Fertiliser Factory, Habiganj and Maulvi Bazar areas (Shahjibazar Power Plant, Tea gardens and others); (c) BFA: KAFCO, CUFL, Raozan Power Plant, Sikalbaha Power Plant, Karnafuli Paper Mills, Chittagong, Comilla, Laksham, Feni areas (industrial, commercial, domestic and others). At present, the Gas Transmission Company Limited (GTCL) is operating the 178 km Kailastila to Ashuganj pipeline (60.96-cm dia) and the North-South Gas Transmission Pipeline. GTCL is also operating the 58 km Ashuganj to Bakhrabad Pipeline (76.20 cm dia), which was constructed and commissioned in 1997. It is also extending the transmission network to Beanibazar gasfield

as well as on the western side of the JAMUNA river. All the gas transmission pipelines that are part of the national gas grid are in the process of being transferred to GTCL. In all these franchise areas gas demand may rise to 25.65 million cu m/day. The BeanibazarKailastila Gas Pipeline, under construction, will also require 1.12 million cu m/day gas in future. Thus the net total gas demand will rise to (25.65 + 1.12) 26.77 million cu m/day. In the near future gas flow will increase by another 7.28 to 7.56 million cu m/day and simultaneously the gas pipeline should increase accordingly. There is a subsidiary company of Petrobangla, the Rupantarita Prakritic Gas Company Ltd, which was formed in 1991 with the objective of developing and popularising CNG in the country.

The downstream activities are mainly confined into eastern region of the country. To achieve millennium development goal, Bangladesh should be out of the list of least development countries by 2015 and all houses of the country will be brought under electric network by 2020. To fulfill such development it is necessary to bring the country under uniform gas transmission and distribution network. After opening of the Jamuna Bridge, gas pipeline network has been expanded in the western zone and further network is expected to expand up to Rajshahi & Khulna district by 2010 under ADB funded Gas Transmission & Development Project. In order to supply gas to North-Western zone of Bangladesh particularly Syedpur Export Processing Zone, construction of Bogra-Rangpur-Syepur-Dinajpur Gas transmission Pipeline (20” or 16” dia X 190 km) project (estimated cost US $ 114.00 or 76.00 million) may be considered on priority basis. Bangladesh encourages Foreign Direct Investment (FDI) to enhance the industrialization of the country. So, public/private entrepreneurs may participate to setup power plant and gas based industries effectively in the western part of Bangladesh.

Future Prospects: The country's present gas reserve of 15 Tcf is modest and will perhaps be enough to meet the need of the immediate future, but not enough to meet the long-term future demand of the country. Bangladesh has been very much dependent on natural gas as its primary commercial fuel. It has no significant oil reserve, no prospect for further hydroelectric projects and the possibility of having nuclear power is as remote as ever. In the above context, natural gas will remain the sole source of commercial energy for a long time to come. If Bangladesh starts exporting natural gas now the present reserve may well be exhausted before an alternative energy source is in sight. This will be catastrophic for the future energy scenario of the country. As far as the current gas reserve is concerned, proved reserve is sufficient up to the year 2011. Thereafter, if probable reserve could be converted into proved reserve, it is estimated to be sufficient up to the year 2015. Further to that, if probable and possible reserves could be converted into proved reserve then it is assumed to be sufficient up to the year 2019. Even, if the projected exploration ventures do not yield significant positive results or existing gas fields fail to prove presently estimated reserve, Bangladesh would need 20-25 TCF additional gases by 2025 to keep up its GDP growth of 7%. Therefore, Bangladesh may have to think about import of gas if significant gas discovery cannot be made. Keeping this in view, the effort of increasing gas reserves has been continuing at the end of Petrobangla. Presently in the FY2009-1 0 the average daily gas demand is planned to be 2,000 MMCFD and it is expected to increase this daily average gas demand upto 4,500 MMCFD in the FY 2019-20, therefore, in Bangladesh, it has become extremely important to explore and develop new gas fields to meet the rapidly increasing demand of gas. To intensify exploration activities, the whole

country was divided into 23 acreage blocks in the year 1988 and was opened for foreign investments. Through two bidding rounds held in 1993 and 1997, 10 Production Sharing Contracts (PSCS) were signed with a number of International Oil Companies (IOCs) for 12 acreage blocks. Out of these, 2 PSCs have already expired. Currently 8 PSCs are active in 10 acreage blocks. Beside this, offshore area of the country has been divided into 28 new blocks and an international tender was floated by the Government in February 2008 to start exploration activities in offshore areas under Production Sharing Contract. In response seven IOCs have submitted bids for 15 blocks. At present two IOCs have been selected for PSCs for three blocks where negotiation is going on.

Fig: Gas Block In Bangladesh (Source : Petrobangla) Regarding the future of gas as a fuel, international energy experts say that oil and gas will remain the prime energy source till 2040, after which natural gas will be the near universal fuel. The use of natural gas will peak in 2050 following which its use will exceed that of oil and gas together. The take-off point of solar energy or other alternative energy will be delayed and will come before 2050. The opponents of gas export have suggested that Bangladesh should wait for a substantially large reserve to be discovered before considering gas export