Bhola gas be costlier than LNG

The government will approve the policy this month to bring gas from Bhola, convert it into Compressed Natural Gas (CNG) and supply to industries.

In the beginning, gas will be supplied to Dhaka, Gazipur and Narayanganj’s industrial areas and finally it will be available within next 2-3 months, according to Petrobangla, the state-run Oil, Gas and Mineral Corporation.

Petrobangla officials said bringing gas from Bhola and turning it into CNG will be costlier than LNG imported from Qatar and Oman under the long-term contract. But the cost will be lower than LNG imported from the spot market. It will also help ease pressure on imports of spot LNG.

Intraco Refueling Limited will supply gas from Bhola to Titas Gas Transmission and Distribution Company by ship after getting approval from Energy and Mineral Resources Division. In the beginning, around 5 mmcfd of gas will be brought and later it will be increased to 50 mmcfd.

It is learnt that a 5-member committee, headed by Kamruzzaman Khan, Director of Petrobangla (Operation and Mining), has been formed to bring gas from Bhola Island and turn it into CNG and supply to industries.

Khan said, “We hope that gas can be brought from Bhola within the next two or three months.”

Intraco Refueling Limited will set up infrastructure after the policy was approved by Energy Division.

Kamruzzaman Khan said after converting into CNG, its price will stand at Tk43 per cubic metre.

The current price of spot market LNG is around Tk62 per cubic metre in domestic market. Besides, LNG imported from Qatar and Oman under the long-term contract is Tk37 per cubic metre.

The Petrobangla data showed on Monday that total gas supplied was 2,687 mmcfd, although the total demand on these days was around 3,800 mmcfd. Due to the gas shortage, manufacturing industry, households and power stations are severely suffering.

Petrobangla officials say there are technical complications in bringing gas from Bhola Island. One of the key challenges is cost barrier. However, Energy Division is also seriously looking at the fact that traders are interested in paying more gas prices to save the industry. In that case, Petrobangla is moving ahead with the plan how quickly this gas can be supplied to the industrial units rather than the issue of cost.

Bapex Managing Director Mohammad Ali said, “We have taken all preparations to supply gas from Bhola’s gas field.” It is possible to start supply any time.

According to the Petrobangla data, there are around 2 trillion natural gas reserves in Bhola Island. State- owned company, Bapex, is operating the gas fields in Bhola. Currently, Shahbazpur gas field has a gas production capacity of 150 mmcfd but there is an average consumption of 60 mmcfd. So, the rest of gas cannot be used in Bhola district.