The possibility of 2000MW power shortage in summer

The country is likely to experience 1500-2000 megawatts (MW) of load shedding at the time of the summer with its full heat.
 
At present, the country generates about 3,600-MW-plus-minus electricity against a demand for over 4,700MW, though the demand is not officially recognized.

Power ministry officials claimed the demand is to be about 4,350 megawatts. The Power Development Board (PDB), however, said the demand would be growing faster with the hot summer starting from May-June.  From their previous experience, they said that the demand would cross 5,500 this year in the peak period of summer.

In 2007, the government has deals to install a number of small power plants under different projects whose total capacity will be about 600MW.  But, none of the plants has so far come into operation.

Among the projects, deals were signed to install a total of 10 small power plants, having a total capacity of 200MW, 15-year-term six rental power plants having capacity of 150MW and 3-year-term another six rental power units having a total capacity of 244MW.

But, of the plants, only the 3-year rental plants are expected to be installed and come into production by the summer. The rest will come into operation in 2008.

However, for lack of adequate gas supply, some of the projects still see uncertainty about timely production. The country is presently experiencing 100 million cubic feet (mmcf) of gas shortage per day against a daily demand for 1,800 mmcfd.

Of the six projects, three plants, each having 50MW capacity, are planned to be set up in the greater Sylhet area-at Kumargaon, Fenchuganj and Shahjibazar. One 40MW plant will be set up in Khulna, one 20MW plant in Bogra and one 34MW plant to be set up in Bhola.

GB/March 26, 2008

Myanmar not accepted Bangladesh request for gas

Myanmar has not accepted  a request to sell gas to Bangladesh to help the country meet its growing energy crisis, saying India and China are its top priorities.

Bangladesh's foreign secretary made the request during a visit Myanmar in February as said by  M. Tamim, special assistant to the chief adviser.

The Myanmar delegates said they would sell their gas to India and China but cannot export gas to Bangladesh at the moment and will consider selling gas to Bangladesh only after new discoveries are made.

The decision is a blow to Bangladesh which faces a daily shortage of at least 100 million cubic feet (three million cubic metres) of gas. It needs the fuel to help feed its economy which expanded by a strong 6.6 percent in the last financial year to June 2007.

The energy shortage would become acute after 2009 if new gas finds are not made, special assistant to the chief adviser, Tamim added.

Bangladesh has daily demand for 1,800 million cubic feet of gas but the country's 23 gas fields can provide only 1,700 million cubic feet as lack of investment in new exploration since late 1990s has outstripped supply.

The  government has already invited bids from foreign oil companies to explore for gas and oil in the hydrocarbon-rich Bay of Bengal.

Bangladesh has proven recoverable gas reserves of 14 trillion cubic feet according to the latest survey.  The reserves are expected to last until 2022 if no new discovery is made.

GB/March 12

Gas crisis halted the plan of power projects at Ctg EPZs

Gas crisis in Chittagong region has created uncertainty over two upcoming power projects in two of the port city's export processing zones (EPZs).

Bangladesh Export Processing Zones Authority (Bepza) in 2007 initiated the process of having exclusive gas-fired power plants at the EPZs as service industry investment and thus cut down the lengthy tendering process. This is the first time the country has opted for power plants as service industry investment mainly to end investors' sufferings and attract new investment. As part of it, Bepza signed two deals with Malancha Holdings Ltd (MHL)--an enterprise of United Group--to set up a 40 megawatt (MW) plant in Chittagong EPZ and another 40MW in Dhaka EPZ. The Bepza earlier this week signed a deal with Korean EPZ in Chittagong to set up another 50MW power plant.

Sources said, of these three deals-the two power plants by the MHL are expected to come into operation by August-September this year. The Korean EPZ plant may come into operation next year.

Each of the Dhaka and Chittagong EPZs consume around 30MW power during production peak hours and the consumption drops down to 10MW.

As Chittagong's gas supplies lag by around 100 million cubic feet a day (mmcfd), the port city cannot generate enough gas-fired power to meet its own demands.

Meanwhile, amid the gas crisis, MHL has arranged five high-efficiency gas engines from Wärtsilä of Finland, and started developing the plant site on the Chittagong EPZ premises.

"The plant shall need gas from June for testing and commissioning purpose. Initially, about 10 mmcfd gas at a pressure of 80-90psi will be consumed by the plant," said a source, adding, "But due to gas crisis, the whole scheme has become uncertain."

This gas crisis was triggered by declining gas production of the off-shore Sangu rig and lack of gas pipeline capacity that could supply larger volume of gas to Chittagong from Titas gas field or the gas fields in Sylhet. According to Petrobangla, there is no project in hand that could resolve the gas crisis within a couple of years. The government is considering a Tk 1200 crore pipeline project that could end this problem but it will take a few years to complete.

"One way to tackle this situation on a short term basis is to divert some gas supplies from the two 210MW Rauzan and the 60MW Sikalbaha plants in Chittagong and supply 10 mmcfd gas to the Chittagong EPZ. These three plants presently consume 120 mmcfd gas. The machines of these plants are not very efficient and it is a good idea to utilize a part of the gas for more efficient production of power," noted a source.

Another idea is to install the plant in Dhaka EPZ, instead of Chittagong EPZ and dedicate the power to Chittagong EPZ. "Dhaka, for now, does not have the problems being faced by Chittagong," he added.

Petrobangla sources said the country will continue to face at least 200 mmcfd gas supply shortfall this year and the situation will continue to worsen.

However, the crisis in Chittagong could have been tackled easily if the government approved a small pipeline project, costing between Tk 40 crore and Tk 50 crore, to transmit high pressure gas from the Titas gas field to the Ashuganj-Bakhrabad (AB) pipeline. The 14 kilometre 20 inch pipeline could transmit 200 mmcfd from the field to the AB pipeline at a high pressure of 1000psi. The work would take just one winter to complete. This Petrobangla proposal, however, did not get due attention of the government.

GB/March 8,2008

Tk 4.0b emergency fund for BPC to manage oil import bill

The government  recently paid Tk 4.0 billion to the cash-strapped Bangladesh Petroleum Corporation (BPC) to help it make payment against last month's oil import bills, official sources said.

The finance ministry released the emergency fund as the country's lone petroleum importer and distributor was having problem to meet the oil import bills worth Tk 15 billion for the month of February.

This is for the first time in the current fiscal that the BPC has been provided with funds by the government, in addition to the budgetary provision for the absorption of Tk 70 billion loan liability of the corporation with state-owned banks.

Sources said the finance ministry, which is providing the fund from the 'Investment on Share and Equities' head, attached three conditions before releasing the fund.

Earlier, the BPC sought the financial assistance from the government to maintain the uninterrupted supply of fuel oil after it suffered losses to the tune of Tk 30 billion in the first six months of the current fiscal.

BPC officials, however, said such budgetary assistance is insufficient in the backdrop of growing losses of the corporation due to steep price hike of petroleum products in the international market.

Energy division secretary Mohammd Mohsin had earlier said that they were urging the government to settle the issue of hard term loan worth more than US$500 million offered by two multinational banks to help the BPC finance its oil imports worth $ 3.2 billion in the current fiscal.

Bangladesh Bank has already provided $300 million loan to the BPC. But it is now unwilling to offer any more foreign exchange to avoid pressure on the country's foreign exchange reserve.

According to the energy division officials, the Islamic Development Bank (IDB), the BPC's biggest oil import funding source, is expected to lend $1.2 billion.

BPC will require a further $500 million in addition to the amount being sought under hard-term loans from the multinational banks.

GB/March 5, 2008

Gas shortage dropping 9 power generation project

The government has dropped nine power plants with a combined generation capacity of 1800 megawatt (MW) from its short and medium term plans due to gas supply shortage in the country,  as said by official sources of Power Division on February 23..

The government earlier took up plans for installation of 45 power plants to supply an additional 6245 MW power to the national grid by 2012. All these plants would need 1233 million cubic feet of gas per day (MMCFD).

The official sources  said that at a coordination meeting with the Petrobangla recently, Power Development Board (PDB), Rural Electrification Board (REB) and Power Cell recently, they  have revised their plan and decided to drop the nine projects where gas will not be available by 2012.

At the coordination meeting, Petrobangla, a state-owned oil, gas and mineral resources corporation, said it would not be able to supply gas to the proposed nine power plants for shortage of gas production.

The Petrobangla assured the Power Division that Petrobangla will supply necessary 889 MMCFD of gas by 2012 to its 36 small and large power plants, which will generate 4445MW electricity.

Following the severe power shortage and its growing demand in the country, the caretaker government has given highest priority to the generation of electricity to overcome the situation.

Under the plan, it has decided to set up 17 power plants with generation capacity of 3775MW in the public sector, 1840MW capacity five plants in the private sector, 410MW 13 rental power plants in the private sector and 220MW 10 small power plants in the private sector from 2007- 2012 period.

According to the Petrobangla forecast, the existing proven gas reserve will exhaust by 2012 and the probable reserve by 2015.Now all the gas fields in the country produce around 1700MMCFD of gas against the demand for more than 1800MMCFD.

About 90 per cent power plants of the country are now operated by natural gas.

GB/23rd February,2008

Raised license fees for petroleum transportation

Government has raised license fees and services charges after 18 years for transportation of petroleum products and oil depots in a bid to generate more revenue from non-tax sources.

The joint license fees for storage of petroleum products by importer and marketing company have been raised to Tk 7,000 from Tk 3,000 for storage of up to 250,000 liters.

The vehicles that carry petroleum products by road now need to pay Tk 800 for carrying every 5,000-liter instead of Tk 200. The ships that carry petroleum oil need to pay Tk 1,500 for every 400-tonne or less instead of the current Tk 500. An extra Tk 200 has to be paid for carrying every additional 100-tonne.

Besides, the test fee for an oil tanker to make it gas-free has been raised to Tk 300 from Tk 100.

An official of energy and mineral resources ministry said the NBR (National Board of Revenue) is yet to issue an SRO (statutory regulatory order) in this regard, although the finance adviser gave his consent in November in 2007.

GB/9th February, 2008