As it grows more desperate for foreign gas supplies to make up for its production shortfall, Bangladesh has put forward a number of intricate plans to import gas – sourcing it from neighbours such as Myanmar and India, as well as using LNG.
Among these is a plan to take some of China’s imports from Myanmar, in exchange for benefits to Chinese investors, Hussain Monsur, chairman of state-run Petrobangla, told Interfax.
Dhaka proposed taking some of the gas Myanmar currently pipes to China under a gas-for-fertiliser deal – under which Bangladesh would use some of the gas to fuel its fertiliser plants, and export the majority of the fertiliser to Myanmar, which has low production and high demand.
In exchange for the fuel, Bangladesh would supply the rest of Myanmar’s gas to Chinese-owned industries in the industrial seaport city of Chittagong, and create a special economic and investment zone dedicated to Chinese investors there, according to Monsur.
Bangladesh raised the proposal during Prime Minister Sheikh Hasina’s visit to China in June, and the Foreign Minister Abul Hassan Mahmud Ali plans to start discussions with Myanmar soon.
“We are hopeful that Myanmar will say yes to this proposal to supply gas to Bangladesh from the fields owned by Chinese firms and some other IOCs,” Monsur said.
China started importing gas from Myanmar in 2013, through a 12 billion cubic metre per year, 800 km pipeline that runs to the southwestern Yunnan province.
Talk of Bangladesh receiving Burmese gas has been ongoing for the past decade, since a pipeline was proposed that to carry gas through Bangladesh into northeast India. However, those negotiations have been stalled since 2005, after the three countries signed a memorandum of understanding for a 29 km interconnector.
Hasina brought up the plan again in December 2011, during a meeting with Myanmar’s President Thein Sein, who said Bangladesh would be given preference for future exports, subject to the discovery of new fields. Bangladesh then suggested the gas-for-fertiliser plan in 2012.
This is among a number of proposals Bangladesh has put forward in recent years to import gas, as its domestic production falls increasingly short of growing demand. Production hovers at 66.3 million cubic metres per day (MMcm/d), against demand for nearly 85 MMcm/d.
The shortfall has prompted Petrobangla to ration new pipeline connections and gas supply to industries, fertiliser factories and power plants, which has hindered economic growth since June 2009.
From TAPI to TAPIB?
At the same time, Bangladesh is also looking to join the long-discussed, long-delayed Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, Tawfiq-e-Elahi Chowdhury, the prime minister’s energy adviser, told Interfax.
Monsur joined a Bangladeshi delegation in a trip to Turkmenistan in May to discuss the TAPI proposal with officials from the Ministry of Oil and Gas Industry and Mineral Resources of Turkmenistan.
“We conveyed our interest in joining the TAPI project, as we are struggling to meet mounting gas demand with local production,” Monsur said, adding that Turkmenistan responded positively.
The meeting came after Bangladesh submitted an initial proposal to the TAPI steering committee, which accepted the idea and asked for a more detailed plan. The government is now set to begin formal talks with the other TAPI countries and the Asian Development Bank (ADB), which is supporting the project, according to Monsur.
However, the addition of a link from New Delhi to Dhaka would be ambitious, particularly for a 33 bcm/y, 1,800 km interconnector that faces huge obstacles in the form of financing, security and technical difficulties – and is already estimated to cost $10-15 billion. The pipeline’s landing point near Delhi is more than 1,400 km from Dhaka.
It would also be expensive for Bangladesh, which would have to pay transit fees to Afghanistan, Pakistan and India on top of the price it pays Turkmenistan, and fund the construction of pipelines to carry gas from India and into the domestic market.
“Bangladesh would benefit from the proposed TAPI gas pipeline if it extends to West Bengal in India, instead of New Delhi,” Monsur said. “We shall raise the issue with India soon.”
As well as pipeline imports, Bangladesh is also moving ahead with plans for an LNG terminal, after signing an agreement with Excelerate Energy for the 15-year lease of an FSRU that would be moored near Moheshkhali Island in the Bay of Bengal.
The deal will be finalised once it has received approval from the government’s cabinet committee, Monsur said.
Excelerate believes the regasifier could be ready to import within two years, Daniel Bustos, the company’s chief development officer, told Interfax.
“Bangladesh has a tremendous need for gas and it has the benefit of being in a good location to receive LNG supply. We’re optimistic about our prospects there and expect to be operational in the next 24 months,” he said.
The terminal would have the capacity to import 5 mtpa, regasify at least 14.2 MMcm/d, and store 138,000 cubic metres of LNG.
Bangladesh has a memorandum of understanding to import 4 mtpa from Qatar Petroleum, which expires in June 2015.
There are also talks of a second, onshore LNG terminal on Moheshkhali Island.
Power Cell, a division of the Ministry of Power, Energy and Mineral Resources, is now evaluating 15 expressions of interest from potential project developers, its Director General Mohammad Hossain told Interfax. The agency is looking for a company to develop a 3.5 mtpa terminal on a build-own-operate basis.
Tapping into Indian LNG
In addition, state-run North-West Power Generation Co. is pursuing a plan to import LNG from India through a new pipeline between the two countries, which would supply a new 750-800 MW combined cycle power plant in Khulna in southwest Bangladesh.
“We already held talks with the Indian state-owned Gail and H Energy to facilitate the import of LNG for the power plant,” North-West Power Generation’s Managing Director AM Khurshedul Alam told Interfax.
Alam and other Bangladeshi officials visited India in September to discuss the project, in which Gail would build the Indian section of the 118 km pipeline, and Gas Transmission Co. would build the Bangladeshi section.
The LNG would come from H Energy’s planned 8 mtpa terminal in West Bengal. Bangladesh would need 1 mtpa of that to supply approximately 3.5 MMcm/d to the power plant – which could be expanded to 14.2 MMcm/d and then 28.3 MMcm/d, depending on demand, according to Alam.
India is expected to issue a work order for H Energy’s terminal by June 2015, after which it would be expected to start up by June 2018, he said. The ADB is considering providing $700 million for the power plant.
– By M Azizur Rahman, Natural Gas Daily