2/20/2014

Gas Famine in Chittagong | NRB Blog

NRB Blog
Multilingual blog on Bangladesh

Gas Famine in Chittagong

Posted on December 15, 2011 by Engr Khondkar A Saleque

The port city Chittagong of Bangladesh is in chronic gas crisis. From the inadequate actions so far taken and inappropriate actions planned it seems that the crisis of Chittagong may not be over soon. The present co-incident peak demand for gas in the Chittagong Region including other regions of South East Bangladesh is now about 450 MMCFD against which Petrobangla can supply about 210-220MMCFD . About 200MMCFD gas deficit have started playing hell in business and commerce of Chittagong as all consumers are suffering from gas crisis. According to the updated Gas Production and supply report available on Petrobangla website the gas demand is

Reports this morning [26th November] suggest that gas supply has dropped below 200MMCFD forcing shutting down of all gas based power plants in Chittagong. It is apprehended that whatever increase is possible over the ensuing winter all may be used for CUFL. No gas may be available soon in Chittagong for power generation. The crisis of Chittagong is mainly due to: Unplanned and unimaginative gas production from Shangu offshore gas field leading to its Not creating additional provision for gas transmission from national gas grid ie not constructing Step Motherly attitude towards Chittagong Region and diverting more gas from Bakharabad Gas Failure to resolve issues with NIKO for further development of Feni Gas Field. Delay in approving Santos proposal for development of Shangu Gas Field. Delay in development of Semutang Gas Field. Adopting unworkable LNG and Coal import initiative.

accelerated depletion. Bakharabad Chittagong Loop line. field transmission Hub for TGTDCL Franchise area.

We are aware that BGSL was conceived and developed in early 1980s to cater for gas supply in the South Eastern Region of Bangladesh specifically for the port city Chittagong. CUFL, KAFCO projects were delayed but a committed group of young BGSL team under dynamic leadership made milestone achievements in BGSL in 1980s and early 1990s. For meeting urgent requirement of expanding Titas Gas Franchise in Dhaka a 75 KM Bakharabad Demra Gas Transmission pipeline was constructed in 1984 despite of serious opposition of TGTDCL. Around the same time shortsighted TGTDCL planners constructed 16/14 OD Titas- Norshindihttp://nrbblog.com/2011/12/15/gas-famine-in-chittagong/ 1/5

2/20/2014

Gas Famine in Chittagong | NRB Blog

Joydevpoor pipeline despite of all indications of massive growth of Demand in Tongi- Joydevpoor and Savar Industrial areas. Consequently Petrobangla made BGFCL produce higher than recommended gas [about 200MMCFD] from Bakharabad Gas Field for meeting the requirements of Chittagong in late 1980s area apart from diverting gas towards Demra.This caused serious damage to reservoir of Bakharabad Gas Fields causing production of sand and damaging subsurface instruments of gas wells and filling gas transmission pipelines with liquid and sludge . Around same time PIU , an unit of Petrobangla under Third Natural Gas Development project developed several gas fields in the North Eastern Region and Constructed a 178 KM long Kolliahtilla Ashuganj [North-South] Pipeline . But in absence of Ashuganj- Bakrabad Gas Transmission pipeline the surplus Gas from Northern Gas Fields could not reach the rest of gas franchise. Consequently when authorities were forced to cut down production of Bakharabad Gas Field first from 160 MMCFD 80MMCFD and then to 35 MMCFD CUFL, KAFCO and Power plants in Chittagong were to be shut down. Due to high handedness of Petrobangla and MOEMR implementation of Ashuganj Bakhrabad pipeline was stuck in quick sand for a while. A syndicate of Gas Mafia made an abortive attempt to ward the PC contract violating World Bank provision which almost made the donor to withdraw fund. However, good senses prevailed and evaluated bidder Australian Company McConnell Dowell Constructors [Aust] Pty Ltd got the contract and new company GTCL achieved a major milestone in its early years in accomplishing the project in record time. Gas supply to Chittagong was restored in May 1997 within 7 months of Bangladesh Awami League led Government in 1996. Shell Cairn Holland Sea research discovered and developed Shangu Offshore Gas Field and took over responsibility of supplying major share of gas market in Chittagong by 1998.Petrobangla planners should have made contingency arrangement for gas supply to Chittagong as relying on a mono source is never prudent in meeting gas demand of growing area. Planning and implementing a Bakhrabad Chittagong Loop line in early 2000 could be ideal solution. It became urgent when Shangu for unimaginative over production started showing ominous signs of depletion in early 2000 after only 3 -4 years of production. Taking advantage of cheap gas small to medium industries grew like mushroom along gas supply infrastructure in Chittagong region shooting gas demand much higher than production and transmission capacity. Petrobangla planners were hibernating throughout late 1990s and early 2000. In consideration of inadequate production increase and saturated transmission capacity there should have been tighter control over gas market growth. But failure of Petrobangla created imbalance in national gas grid . Demand started outstripping supply. ANSI #400 Bakharabad Chittagong pipeline at 960PSIG inlet and 500PSIG outlet was designed for a maximum capacity of 350MMCFD.But maximum available pressure at Bakharabad Gas Hub and dilapidated condition of Bakharabad-Chittagong Pipeline reduced the capacity to 230-240 MMCFD through the pipeline. Of this 35-40 MMCFD is now required in Greater Comilla and Greater Noakhali regions. Chittagong gets only 200 MMCFD. Shangu adds about 14-15 MMCFD. Hence Chittagong can get only 215-220 MMCFD against a demand of 410-420 MMCFD. The deficit of about 200-210 MMCFD has created the gas famine in Chittagong. From the presence of Condensate at Bulk CMS in Chittagong area it is evidenced that Transmission system has huge accumulation of Condensate and sludge which are causing further impediments to capacity utilization. Perhaps in last pigging the proper procedure was not followed. Right kind of pig was not possibly there or pig was run too fast.

http://nrbblog.com/2011/12/15/gas-famine-in-chittagong/

2/5

2/20/2014

Gas Famine in Chittagong | NRB Blog

Present Initiatives for Confronting Crisis. Government took some initiatives to confront crisis over short, mid and long term basis. Needless to mention that short term initiatives did not work as System continues to suffer after almost third year of the government . Load Management: Situation forced government to suspend all kinds of new gas connection in the Chittagong area. But even then situation continues to deteriorate.Several investors investing huge foreign exchange in setting up gas based industries are not in a position to start production for the last 3-4 years. Chittagong system cannot supply gas to all fertilizer plants and power plants simultaneously. Gas supply to all consumers suffers from lack of supply and low pressure. Santos at Shangu: Australian Company Santos taking over from Cairn discovered some additional resources around depleting Shangu Gas field. To justify their additional risks investment they requested Petrobangla to either increase gas price included in PSC of early 1990s or let them negotiate gas price of IOC share of profit gas directly with willing downstream consumers. If approved by June 2010 Santos could add at least 40MMCFD gas to starving Chittagong market by March 2011. Unfortunately Petrobangla /EMRD acted like penny wise pound foolish. The protracted approval process took almost a year. Now if everything goes on well Santos may supply 40-50 MMCFD gas by March 2012. For red tapes of Petrobangla /EMRD Chittagong Gas system suffered a almost a year. Who will account for this lapse now? 40MMCFD additional gas to Chittagong one year earlier could mean a lot to gas hungry Chittagong market. Santos in its efforts to explore for Shangu 4 struck abnormal pressure and abandoned the well. It has moved Shangu 11. If successful gas from Shangu 11 may start flowing into Chittagong market from March 2012. LNG and Coal Import Initiatives: Government embarked on unimaginative LNG and coal import initiative without even bothering for their adverse impact to countrys fragile economy. Bangladesh requires huge investment to set up enabling infrastructure for import. It also cannot absorb huge cost of LNG and coal. Economy is already bleeding from impacts of allowing some liquid fuel based power plant. How can we dream to import LNG at not less than 1213US$/MMBTU. Present Gas transmission and Distribution infrastructure cannot absorb 500MMCFD gas. Moreover Gas converted from LNG may have different heating value different composition.LNG import so has insurmountable technical and financial barriers Coal price in international market is also very high now. Moreover, who will bear the expenses of setting up infrastructures? Today or tomorrow government has to abandon the plan. When initailly planned Government announced that by 2012 Chittagong will have 500MMCFD equivalent LNG. It is November 2011. LNG initiative is actually hibernating. Some people having little or no idea about LNG business took the nation for a ride.On the other hand leaving our high quality coal underground initiative to import coal from abroad must be considered as a crime against national interest.
http://nrbblog.com/2011/12/15/gas-famine-in-chittagong/ 3/5

2/20/2014

Gas Famine in Chittagong | NRB Blog

Petrobangla Gas Production Augmentation plan: Of the current initiatives development of Semutang may supply about 15-20 MCFD for some years to Chittagong market by December 2011. Due to capacity constraint of Bakharabad-Chittagong pipeline and its present condition it may not be possible to transport additional gas from Salda and other upstream fields to Chittagong market. Possible Gas Supply Augmentation in Chittagong: Depending on success of all present initiatives it may be possible to supply about 60-70 MMCFD addional gas to Chittagong by March 2012. Shangu : About 40-50 MMCFD for 2-3 years from March 2012 Semutang: About 15 -20 MMCFD from End December. About 15 MMCFD additional gas from upstream by end 2011.

Bakharabad Chittagong Gas Transmission loop line: Bakharabad-Chittagong Gas Transmission pipeline is not in good shape. Transmission of wet gas and sand from Bakhrabad Gas Field from 1988-1996 have caused serious internal erosion and corrosion. If intelligent pigging is carried out it may evidence that line pipe thickness may have reached marginal state for high pressure gas transmission. A loop line is very urgently required. Government must immediately take up a contingency plan to construct 178 KM long 30OD bi directional Bakharabad- Chittagong gas Transmission pipeline with a target to complete it by December 2013. If necessary it can be built by PPP basis finding some private sector partner for GTCL. Construction of Compressor station at Ashuganj and Ashuganj- Bakhrabad Loop line will bring additional gas to Bakhrabad Gas Hub by end 2013. Part of this gas must be allocated for Chittagong through the proposed loop line. Bidirectional nature of the loop line will facilitate reverse flow from Chittagong area to National grid if in future that situation arises. Resolution of Dispute with NIKO: Feni gas field must be developed to full potential immediately. For whatever is required must be done. About 15-20 MMCFD gas from Feni for Chittagong will mean a lot at this satge. Import of gas from Myanmar: Bangladesh can reopen dialogue with Myanmar for import of gas for Chittagong area from future prospects. GAZPROM the Russian Energy giant is contracted to explore at Myanmar.It may soon find some major new gas. For its long term energy security Bangladesh must start serious dialogue with Myanmar. Prime Minister of Bangladesh is due to visit Myanmar soon. Discussion about Gas Import must be included in the agenda. Reopening of dialogue on Tri Nation Gas Pipeline is also suggested . Government must reassess all its priorities, review its plans and adopt correct strategy to address energy needs of Chittagong. Keeping the port city and industrial hub gas hungry and energy hungry Bangladesh cannot
http://nrbblog.com/2011/12/15/gas-famine-in-chittagong/ 4/5

2/20/2014

Gas Famine in Chittagong | NRB Blog

expect healthy economic growth. We hope policy makers will soon appropriately diagnose the chronic crisis of Chittagong and the entire country and for their own sake of survival take appropriate decisions.
Rat e t his:

Rate This
Share t his:

Facebook

Twitter

Email

Print

Like
Be the first to like this.

Relat ed Gas Value Chain in Total Mess In "Bangladesh" Ram adan Anxieties for Chittagonians In "Bangladesh" Condensate Pilferage from National In "Bangladesh"

Follow

About Engr Khondkar A Saleque Follow NRB Blog Khondkar Abdus Saleque, known to his friends as Saleque Sufi is a Professional Engineer [PE] of Engineers Australia and Life Fellow of Institute of Engineers of Bangladesh. He is Bangladeshi Australian and is now working In Afghanistan. Saleque Get every new post delivered graduated in Chemical Engineering from BUET Dhaka Bangladesh in 1977 and has undergone post graduation professional to your Inbox. training on Gas Transmission from Netherlands, Gas Metering and Regulations from UK, Energy Sector Regulation and pricing mechanism at Calgary, Canada, Join 27 Project other Management followers at WB, Washington DC and ADB at Manila. He represented Bangladesh at various national and international seminars and workshops. Saleque was Bangladesh representative of SAARC Energy Ring CoEnter your at email address of Energy and Gas Value Chain from 1977 in Bangladesh, Thailand, Ordination Committee. He has worked all segments Netherlands, Australia, and Qatar in planning, project management and system operation. He worked for 27 years In Sign me up Bangladesh Gas Sector from 1978 -2005. His last assignment in Bangladesh was Director [Operation] GTCL. He is now working as Energy Specialist for an US Company AEAI [USAID Contractor] in Afghanistan. Saleque played cricket and soccer as by a WordPress.com professional. He is sports writer Pow andered edits cricket Magazine Crickettomorrow [www.crickettoomorrow.com] published from Canberra Australia. Saleque also works as freelance Energy Journalist for several Energy Magazines [Energy & Power {www.epbd.com}, Energy Bangla, E-Bangladesh]. View all posts by Engr Khondkar A Saleque

This entry was posted in Bangladesh and tagged Chittagong, Gas. Bookmark the permalink.

NRB Blog
The Twenty Ten Theme Blog at WordPress.com.

http://nrbblog.com/2011/12/15/gas-famine-in-chittagong/

5/5