Bangladesh Gas Crisis: Broken Promises, Leaky Pipes, and Energy Dreams Gone Dry

The report details the reasons behind Bangladesh’s Gas Crisis: extraction shortfall, missing targets, bureaucratic hurdles, and concerns of a nation longing for energy independence. Let’s Reveal The Truth of Gas Extraction Situation in Bangladesh.

Plans to enhance domestic gas production through drilling have encountered significant obstacles, exacerbating the country’s energy crisis and affecting both factories and citizens. Despite assurances to alleviate gas shortages, government agencies have fallen considerably short of their targets, prompting scrutiny regarding their efficiency and implementation.

Drilling Dreams Derailed: Falling Far Short of Targets

The Department of Energy and Mineral Resources had set a target of drilling 46 wells over four years to increase gas extraction, with 21 wells planned for the first two years i.e. Between 2022 and 2023. Although there have been only 9. During the same period, the new wells are expected to add 280 million cubic feet of gas per day to the national grid. Only 2.5 million cubic feet has been achieved, which is 9 percent of the target.

Coastal Conundrum: Bay of Bengal Holds Unanswered Energy Questions

Coastal distress deepened the crisis. Sources in Petrobangla said despite the settlement of the maritime boundary dispute decades ago, there is little momentum in oil and gas exploration in the Bay of Bengal. This has added to the plight of Bangladeshi industries, many of which have already shut down due to gas shortages.

The condition of gas is worse than what it was before the price hike. Many factories are now closed. If this continues, more factories will be closed. Gas shortages are also affecting homes, with families struggling to cope with dwindling supplies for cooking and daily use. In households across the country, the absence of a reliable gas supply has forced residents to resort to various stoves, including LPG cylinder stoves and electric stoves.

The ever-increasing prices of liquefied petroleum gas (LPG) and electric ovens have added to the difficulties faced by households. Source: Mohammad Ali, President, BTMA, It has been six months since the Cabinet approved the new Production Sharing Agreement (PSC) to share gas with companies after extraction. However, tenders were not called.

Meanwhile, production from onshore gas fields is decreasing year by year. Imports from abroad cannot be increased due to the US dollar crisis.

Factories Falter, Homes Fizzle: Daily Struggles of a Gas-Starved Nation

All in all, there is a gas crisis in the country. Meanwhile, six districts including Chittagong were suffering from a gas crisis on January 19 due to a fault in the liquefied natural gas (LNG) terminal imported from abroad. LNG supply has started again from last Saturday. However, the demand cannot be met.

According to the sources of the concerned government agencies, even if the fault in the LNG terminal is repaired, there may be a gas crisis in Bangladesh throughout the year. As industries will suffer, common people will have to suffer without getting gas for cooking and transportation.

  If all the wells were drilled, it was reported at the time that the gas supply would increase by about 620 million cubic feet per day, which is about 25 percent of the current supply.

Price Hike Pains, Still No Gain: Can Domestic Extraction Ever Catch Up?

In 2022, the dealers asked the government to guarantee a stable supply of gas and pay higher prices if necessary. The government hiked gas prices by 180 percent in January 2023. However, the gas problem remains. Although traders are now paying higher prices, running factories remains a pain.

The country needs 380 million cubic feet of gas per day. A supply of 3 billion cubic feet can almost meet the demand. Less than two and a half million cubic feet have been supplied for two months. About 200 million cubic feet of this comes from the country’s gas fields. The rest is imported LNG.

Import Trap and Foreign Fix: Dependence Deepens, Solutions Remain Elusive

The government started importing LNG from abroad in 2018. But experts have always warned of the dangers of being dependent on imports. They recommend increasing the national intake. But the government tends to import. In 2022, LNG imports declined due to the US dollar crisis.

To meet this problem, the Department of Energy and Mineral Resources has decided to increase the amount of internally extracted gas. To improve gas extraction, 46 wells are expected to be drilled by 2025. Of these, six wells are expected to be drilled in 2022 and fifteen in 2023.

At the time, it was estimated that with each well drilled, the daily supply of gas would increase by about 620 million cubic feet or about 25% of the current supply.

According to energy department insiders, nine wells have been drilled on time, and three more are already underway Drilling of 14 wells is scheduled for this year and 11 in 2025

A hundred more wells will be drilled, according to the Energy Department. In all, Sylhet Gas Field Company will dig 14 wells. Seven were to be completed in the first two years. 7 were to be completed in the first two years. But the work of three has been completed. And a work in progress, which can be completed within a month.

Three Companies, Three Tales: BAPEX Pushes, SGFL Stumbles, BGFCL Lags Behind

Petrobangla Corporation is responsible for the extraction of mineral resources. Three companies under them are involved in gas extraction—Bangladesh Gas Fields Company Limited (BGFCL), Sylhet Gas Fields Company Limited (SGFL), and Bangladesh Petroleum Exploration and Production Company (BAPEX). Of these, only BAPEX is capable of drilling wells. And the remaining two companies work by hiring contractors.

Speaking to representatives of Petrobangla and the three companies, they cited several reasons for not drilling the wells on time. They claim that the plan to dig 46 wells in four years has not been realized. Bangladesh’s drilling experience is limited to two or three wells per year. It is not possible to drill more wells in less time. As a result, reaching the target by 2025 will be impossible.

The people concerned also say that it takes more than a year to approve a development project proposal (DPP) for drilling wells. After that, it takes a few months to acquire the land and buy the machinery. An exploration or development well takes at least three and a half months to complete after drilling begins. And it takes two months to dig the repair well.

According to officials, there is much talking and planning. But implementing it is challenging. More wells can be drilled if several foreign companies are contracted.

Abdul Mannan Patwari, director of planning at Petro-bangla, told Bangladesh Reports that the rate of well drilling would be faster if a contract with a foreign firm was signed.

Reasons for slow drilling of wells

Petrobangla’s subsidiary Bapex wants to drill 20 wells in four years. In the first two years, they wanted to drill ten wells. Although five were excavated.

They were already drilling three wells in Bhola, Bapex sources said. All three had gas. Wells were drilled at Shariatpur but no gas was found. Although gas is found by drilling wells in Comilla’s Srikail gas field, it is not economically feasible to extract it. Apart from this, a well-digging work at Sundalpur in Noakhali is likely to be completed next month.

Managing Director of Bapex. Shoaib told Bangladesh Reports that efforts are being made to drill all the wells within the allotted time. In all, Sylhet Gas Field Company will dig 14 wells. Seven were to be completed in the first two years. However, three tasks have been completed. And an ongoing project that can be completed within a month. Company sources said two wells drilled by them have supplied an additional 1.6 million cubic feet of gas to the grid. Another exploratory well yielded new gas as well as oil. But the extraction of gas may take another 8 months or more.

Sylhet Gas Fields Company Managing Director Mizanur Rahman told Bangladesh Reports that it takes time to acquire land, hire contractors, and bring mining equipment. But all the work will be completed within the stipulated time.

Twelve wells are planned to be drilled by Bangladesh Gas Field Company Limited (BGFCL). Four of them were supposed to be mined by 2023. Although they did complete one. 8.5 million cubic feet of gas has been added to the system from this well. Construction of another recovery well could begin later this month.

Out of the total 8 refurbishing wells, apps have been submitted to the Energy Department for the remaining six. Apart from this, four development wells will be drilled, for which DPP is yet to be prepared. If the financing is confirmed, the DPP will be finalized, said the managing director of BGFCL. Abdus Sultan.

Foreign Firms Enter the Fray: Can They Turn the Tide Against Delays?

Apart from the domestic company Bapex, foreign companies are also engaged in drilling wells. Examples of foreign corporations are Ariel Corporation in Uzbekistan, Chine-pack in China, and Gazprom in Russia. Jobs are given to foreigners without public tender.

According to sources inside the Energy Department, five wells will be drilled by Sinopac Petroleum Corporation. Gazprom has been commissioned to drill 20 wells since 2012. They will drill five more wells.

According to the Energy Department, well drilling by BAPEX alone would take a long time. In this way, employment arrangements are being made for foreigners. On the other hand, BAPEX has been accused of hiring foreign workers without increasing employment.

Expert’s Verdict: Imported Ambitions, Domestic Delusions

Geologist Badrul Imam told Bangladesh Reports that the government’s dependence on imports has created problems. Businessmen and common people are victims of this. It is impractical to obtain domestic gas in the present system. The plan taken to extract domestic gas is not realistic.