Private firm gets nod to supply gas from Bhola to industries

The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved in principle a proposal of the Energy and Mineral Resources Division to allow a private firm to supply gas in CNG (compressed natural gas) from the Bhola gas field.

As per the proposal, local firm Intraco Refuelling Station Ltd will initially supply 5 million cubic feet per day (MMCFD) gas and later 20 MMCFD gas to the private industries in Dhaka from Bhola gas field under the Sundarban Gas Company Limited (SGCL) under a 10 years contract.

Finance Minister AHM Mustafa Kamal presided over the meeting of the CCEA) while other members attended it.

Bangladesh Petroleum Exploration and Production Company Limited (Bapex) has discovered the Bhola gas field. However, nothing was mentioned about the rate of the gas to be sold to the industries.

Both the Bapex and SGCL are subsidiaries of the state-owned Petrobangla, the principal petroleum corporation responsible for dealing with both upstream and downstream production and supply.

Petrobangla Chairman Zanendra Nath Sarker, however, recently said the surplus gas from Bhola fields will be supplied to factories in Dhaka, Gazipur and Mymensingh's Bhaluka from early June this year.

Officials said the Intraco Refuelling Station has been selected for the contract under the Promot Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010.

Currently, about 2300 mmcfd gas is being produced from 22 gas fields in the country, while about 700 mmcfd gas is being imported from abroad to meet the demand of about 4000 mmcfd, leaving a deficit of about 1000 mmcfd.

The two Bhola gas fields have around 200 mmcf production capacity, while the production hovers between 80-85 mmcf.

Therefore, around 120 mmcf surplus capacity remains unused in the eight wells of the Shahbazpur and Bhola gas fields.

Due to the lack of pipeline and transmission facilities, the government was unable to supply the surplus gas from the Bhola field to other energy-hungry industrial zones in Dhaka and elsewhere.

At present, the rate of compressed natural gas (CNG) is Tk43 per unit (1 cubic metre), including Tk35 as the feed gas price and Tk8 as the operating margin.

But due to compression, transportation and then depressurisation, alongside different other charges, the price for Bhola gas might cost over Tk 56 per unit, said the officials.