World Mining Exploration News

Bangladesh Energy Situation

The energy situation in Bangladesh is going from bad to worse everyday. As anticipated the hurriedly taken contingency actions of Care Taker Government so far failed to bring any improvement so far. Care taker management must have realised by now that it requires professional skills of very specific line professionals to make things happen and not the politically and otherwise blessed personnel. In the high summer PDB can only supply a maximum of 2900 -3000 MW against a daily demand of 5200 MW. The consequent 2200 MW deficit is playing hell with country’s business commerce and industry. Civic life is suffering from severe all-round problem. We should try to imagine when a developing country fails to meet even 60 % of its demand (including significant suppressed) how it can maintain its economic development.

Bangladesh to sustain its relentless struggle against poverty desperately needs employment generation .That is only possible through industrialisation, reconstruction of rural economy. If Bangladesh can not resolve its power generation and supply problems the poverty alleviation through ensuring power for all by 2020 will always remain a day dream. The situation of our energy sector now is the result of mismanagement, lack of good governance, sponsored corruption and lack of political commitment. We have failed as a nation to analyse & appreciate the problems of energy sector and solve these as very critical national issues.

Let us start asking few questions? Do we all appreciate that all segments of Energy Value Chain development and operation need very skilled and qualified manpower? Do we all believe that energy issues are national issues and hence must be kept out of politics? Do we all believe that military and civil bureaucrats must not crowd in Energy sector to frustrate the experienced line professionals? Do we all believe that by not exploring and exploiting our petroleum and coal resources to meet our fuel requirements we have committed crime to the nation?

Those of us who were involved in key positions of energy sector and those who are still there must do soul searching, we will get the answers. Unless we have proper measures of ourselves we can never combine our efforts to come out of the deep hole.

Working in power and gas sector for some persons was exploiting the golden eggs of the golden duck. Many made fortune out of it .Once the duck is in ICU we have become out of wits.

The leading Bangla newspaper in lead news indicated that Power supply situation has reached rock bottom.

The official demand figure shown on the day was 5000MW and generation shown as 2932 MW.PDB mentioned that for gas supply shortage alone it failed to generate about 850MW and for maintenance and overhauling of plants another 323 MW power could not be generated. So effectively for our lapses and failures about 1173 MW power could be generated on the day.

It clearly states that Bangladesh has huge deficit and substantial unmet demand. Naturally investors of power plant development must rush to take the advantage. But then why investors are reluctant to come here. Why the 450MW Power Plant at Nabiganj beside Bibiyana Gas field failed to get appropriate response. There is no political government in power .There is no hartal or political confrontation on the street .Then why only one bidder finally submitted bid? There must be something wrong somewhere.

One of main reason for the present diabolic power supply situation is gas supply constraint. Gas accounts for almost 90% of power generation. Power is the cornerstone of national economy. Over the last several years demand of power and gas grew in geometric progression yet the power sector did not grow at all and gas sector failed to explore its resources and develop its resrve.

Bangladesh possibly was scared that if we go for extensive exploration and discover significant resrves there will be pressure for export. So we even tried to hide the result of some reservoir study of Titas and Habiganj gas fields and did not go for required development.Can anyone give valid reasons why the ADB sponsored GSDP project is taking such a long time to implement? If most of the components of GSDP progressed appreciably by this time much of the present gas crisis could be avoided.

India and Myanmar achieved significant success in exploration for gas in the Bay of Bengal. Bangladesh although very late yet finally went for bidding for blocks in deep water. But why Bangladeshi effort got poor response? Bangladesh government warded several blocks for exploration to Chevron and Cairn in Southern region. They virtually did nothing for almost 7 years. If Chevron and Cairn explored in block 5, 7 & 10 in initial years there could be some significant discovery now. But why did we sign such PSCs allowing them hibernate over the blocks for several years while our energy security dipped?

We all say power sector miserably failed to set up required nos of power plants over the last 7 years to meet the deficit and emerging demand. Many of these if implemented would not have got fuel supply – gas supply. Then which segment has greater failure gas or power? Most of these plants which PDB failed to implement were very much in the power sector master plan for which Petrobangla committed gas supply.

It is a shame now that after more than 53 years of gas experience we failed to develop a credible reservoir division which can independently and credibly undertake reservoir study and management. Wrong professionals, academicians and even economists dispute over countrys gas resource and resrve. All over gas industry these days 4D seismic survey is conducted on petroleum reservoirs and integrated reservoir management is done to utilize every drop of this precious resource. But Bangladesh neither has any exploration plan, depletion strategy nor it could undertake even 3D seismic of its major gas fields. During the debate on gas export proposal some people raised hue and cry that the country’s gas resource will deplete soon. To establish that some people leading gas sector remained inactive, delayed all exploration and development efforts to crate the present crisis. It is honestly felt that if we could undertake systematic appraisal cum development of Titas, Habiganj, Rashidpoor, Kaillastialla and redevelopment of Bakhrabad in time by this time our national production capacity could be at least 2200MMCFD. Side by side if we could develop Shahbazpoor gas field and construct a Large enough gas pipeline from Bhola – Khulna as conceived under WRIP of UNOCAL we could set up some gas based power plant in the Khulna, Barishal region by this time. Chevron and Cairn could be pushed to expedite exploration in the region.

People say we have substantial reserve of high quality coal. Some of these are at shallow depth. Very proven and sophisticated mining technology which includes appropriate water management can very well ensure recovery of maximum amount of this resource to fuel power generation and other industry. But we are so luxurious that sitting in air condition room of Dhaka we organise seminars and using NGO money we campaign against most appropriate method of mining. If Phulbari mine was given go ahead in time ensuring proper rehabilitation of affected people and strict monitoring of environmental impacts there could be first coal on surface by now. We could progress a great deal in setting up coal fired plants. It is sad that even neutral CTG failed to appreciate the reality and digested the pills of anti development venomous group. Coal policy required several years to come to this stage. If it is passed in the form it is now no international company of repute will come to join hands with rookie Bangladeshi Khoni or Khuneey Bangla to explore coal. International investors monitor very closely how Bangladesh treats the investors. There are no reasons to waste time, energy and efforts in trying to win contracts in corruption infected Bangladesh energy sector and waiting till eternity for award of contract. Bangladesh even does not honor signed contract.

The Government post 1/11 in almost three fourth of its term failed to make any change .Rather the situation has deteriorated. Over the last two years the power demand increased about 1500MW but no major new addition. Rather in someway the effective capacity has gone down. Raujan power plants can not operate at full capacity; Plants at Shikalbaha are shut down. Gas supply constraints also restrict generation at Ghorashal, Horipoor, Bagahabari and Shambhooganj. There is no possibly that situation will improve soon.

CTG signed contracts for several Contingency plants ignoring advice of experts .None of this could commence generation in time. The tiny Bogra plant which is in operation is a gas bill defaulter. PDB failed to make Harbin commence operation from Fenchuganj plant. Poor project management and lack of supervisory overviewing.

Power Cell received only one bid for Bibiyana 450MW plant, there is every possibility that same situation may happen at Sirajgonj. The major Bangladeshi investors Summit Group many opine have been deliberately kept out to create illegal situation for others. It is highly unlikely that Power cell can make award for either plant. This may be legally challenged.

There may be severe power crisis in September when majority Muslim community will observe fasting. There is no magic that can improve situation. Petrobangla and PDB are not Seeing Eye to eye about suspending gas supply to inefficient power plants. PDB may have their own reasons .If this do not improve situation better not do it. Government has announced suspension of extending power distribution facility for rural communities. This unfortunate decision must be reviewed. Rural community must not be made to suffer. Remember our farmers are our life line. They still grow and supply our food and in turn we suck their blood through corruption and mismanagement of country/s resources.

CTG in the remaining time must not try any new adventure. It should try it level best to make whatever progress is possible in demarcating maritime boundary with Myanmar and India. It must try to complete 3D seismic survey of major gas fields, make award for pipeline compressor stations of GTCL. It should also ensure that BAPEX gets its promised fund to progress in drilling at Semutang, Salda and further explore Sreekail.In. CTG should also ensure that Chevron and Cairn goes for exploration in block 5, 7 & 10, Cairn must complete exploration of Magnama and Hatiya. GTCL must make meaningful progress in other major transmission infrastructure projects.

CTG must resolve the impasse with AEC for Phulbari mine development. Intelligent advisory council must be very careful in dealing with coal policy. The capacity, experience of Bangladesh in coal mining and requirement of exploring maximum resource in proven technology with effective environmental and safety measures must dictate. People say Bangladesh will loose fertile land if the open pit mining is allowed. But in places where almost entire mining area has been recovered after progressive mining does not support the view. Advisors must realise coal policy has been formed and opined by persons who never ever were involved in mine design, mining and mine management. There must be serious thought whether we should have any coal policy at all. Coal policy is required to ensure free flow of FDI for coal sector development for creating diversity of energy basket and not to create unnecessary impediments.

CTG has to either extend contracts of existing CEOs of Titas Gas, GTCL and RPGCL -3 major gas sector companies or appoint new persons. Jobs in energy companies must be made attractive with provisions for reward and punishment for good and bad works. These companies are vital organs of gas sector .Visionary skilled professionals of strong personality must be engaged for moving these companies forward.

In the power sector government must not try to hurry. There is no point making award of development of major power stations based on single bid. A delay of one year will not make much difference when the damages are already done.

CTG may try to reopen discussion with Myanmar and India for Tri Nation pipeline. Mohona Holdings can advance the initiatives but under no circumstances any cross border gas transmission pipeline will happen without sovereign agreement among three nations. Gas supply crisis in Chittagong area will get permanent solution if we can make the Tri Nation Pipeline happen and can route it through Chittagong.