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Power and Energy: Bangladesh Scan M Tamim PMRE Dept, BUET [email protected] Jan 2009

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Page 1: Epls Presentation

Power and Energy: Bangladesh Scan

M TamimPMRE Dept, BUET

[email protected]

Jan 2009

Page 2: Epls Presentation

Presentation Outline

BackgroundLast Ten YearsPresent StatusWas Petrobangla sleeping?Petrobangla LimitationWhat to do?POWERWay Forward

Page 3: Epls Presentation

Background

Gas Discovered 1959 (chattak1) First Commercial Use 1962 (CCF) Dhaka Household Supply 1968Major fuel switching between 1980-85After Independence 3 rnd of PSCsFirst PSC production from 1998Present production BD 50%: IOC 50%

Page 4: Epls Presentation

0

2

4

6

8

2P G

IIP tc

f

1950 1960 1963 1977 1988 1990 1996

Year

Res Rev

Bangladesh Gas Discoveries

Chattak

SylhetR

ashidpur

Kailashtila

TitasH

abiganjB

akhrabad

Jalalabad

SanguB

ibyiana M’bazar

PB discovery between 1977-2004is 2.5 tcf at 3:1 success ratio

Background

Shell (P) Discovery

Page 5: Epls Presentation

Last Ten Years1998 – Bibiyana 4 tcf gas discovered and stranded till 2004 dev request from PBAll IOCs stopped exploration from 19992000 – Unocal proposed gas export2001 – Bangladesh Forex reserve $ 1.3 bil

yearly IPP and gas payment $400 milBusiness unable to open LCPetrobangla behind IOC payment by 6-7 months

2002 – 9-member Gas Util Committee formed

Page 6: Epls Presentation

Last Ten Years

2002 Gas Util Comm Report

At least 5 year lead time required between activity and discovery‘Limited export’ from new discovery is suggested as a market signal to initiate immediate exploration work (PB forex burden would reduce) As first right of refusal in the contract, Bangladesh can always buy the gas (avoiding any export option) Irrespective to the reserve potential (floating on gas!) if ‘new gas’ is not found, unmet demand will kick-in as early as 2010If proper measures are not taken the ‘export’ and ‘import’ will not be far apartEncourage increase of gas use

Page 7: Epls Presentation

Last Ten Years

No market signal of any kind was given to encourage vigorous explorationIOCs relinquish all areas of risky investment and just maintains minimum work program to hold onto the good prospectsOnly Bangura (.44 tcf) is discovered by Tullow within old seismic data area (Leanest decade in BD exploration history) In absence of IOC activities, BAPEX was also kept idle from exploration workTo use up Bibiyana reserve, gas use was encouraged in all sectors (the only recommendation implemented by the governments)

Page 8: Epls Presentation

Present Status

Total Production 1800 MMcfdPetrobangla 900 MMcfdIOCs 900 MMcfd

Demand 2000 MMcfdUnmet demand 200 MMcfd

Due to transmission limitation 100 MMcfdDue to production limitation 100 MMcfd

Page 9: Epls Presentation

Tullow4%

Niko0.29%

Cairn3%

SGFL10%BAPEX

2%

Chevron41%

BGFCL40%

Pro

du

ctio

nPGCL0%

BGSL6%

JGTDSL4%

GTCL70%

TGTDCL20%

PGCL4%

JGTDSL6%

BGSL16%

TGTDCL74%

Power42%

Loss3%

Dom10%

CNG5%Tea

0.2%Com1%

Ind13%

Cap11% Fert

15%

Supply Chain1778 MMCFD

Distrib

ution

Tra

nsm

issi

on

Consumption

Page 10: Epls Presentation

Annual Gas Demand at Different Growth Rates

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Tcf

3%

7%

1.28

1.06

0.88

0.72

0.60

Year 2000 consumption = 0.33 Tcf

How did we arrive here?

For the first time demand has outgrown all forecast!

Page 11: Epls Presentation

Growth of CNG Filling Stations

7 2 3 6 41 41 23 42 647 9 12 18

59

100

123

165

229

0

50

100

150

200

250

1983-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-08(April '08)

CNG Stations Cummulative Nos.

YEAR

NO

S.

1Pabna

86Bogra

1B’baria

1Lakhmipur

813Sylhet

116229Total

25Feni

612Comilla

1729Chittagong

12Manikganj

2Tangail

3Narsingdi

3Kishorganj

69N’ganj

627Gazipur

416Savar

5899Dhaka

Conversion Workshop

CNG Station

LocationCaptive Power Growth was equally phenomenal

Oil price rising

Page 12: Epls Presentation

Was Petrobangla Sleeping?

Page 13: Epls Presentation

GAS PRODUCTION-PETROBANGLA & IOC’s : FY 2002-03 to 2007-08(Jan,08)

02000400060008000

1000012000140001600018000

Gas

in M

MSC

M

PB 9449 9715 10086 10117 10149 5410Cairn 1466 1480 1341 1573 1128 417Chevron 1011 1626 2158 2930 3954 3353Tullow 0 0 0 76 565 402NIKO 0 0 198 225 124 33TOTAL 11926 12821 13783 14921 15920 9615

2003 2004 2005 2006 2007 2008

Page 14: Epls Presentation

Production Increase Between 2007 and 2008

17701644Jun17541646May17571644Apr16861574Mar15721496Feb16711407Jan

20082007Month

AVERAGE DAILY GAS PRODUCTION (MMCFD)

Avge increase of 120 MMcfd was mostly used by non-bulk

Page 15: Epls Presentation

GAS SALES STATEMENT :FY 2002-2008(UPTO JAN,08)

0

2000

4000

6000

8000

10000

12000

14000

16000

Gas

in M

MCM

2002-03 5274 2716 741 1182 128 15 21 0 1269 11347 9.90%2003-04 5647 2628 904 1313 136 5 23 55 1395 12106 6.69%2004-05 5975 2661 1070 1456 138 0 23 103 1491 12917 6.70%2005-06 6354 2523 1384 1791 147 0 21 194 1607 14020 8.61%2006-07 6262 2647 1770 2194 160 0 21 335 1791 15185 8.30%2007-08 3711 1313 1248 1445 106 0 17 328 1117 9286 4.83%

Power Fertilizer Captive Industry Comm Brick Tea CNG Dom Total %of increase

Page 16: Epls Presentation

System Loss

177

655

776

692678

537

0

10 0

2 0 0

3 0 0

4 0 0

50 0

6 0 0

70 0

8 0 0

9 0 0

2002

/03

2003

/04

2004

/05

2005

/06

2006

/0720

07/08

(Upto

Nov

)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Gas

in M

MSC

M

Outstanding bill of Tk 270 crore recovered since Jan 2007

Page 17: Epls Presentation

Petrobangla Limitation

Page 18: Epls Presentation

Petrobangla LimitationTotal IOC E&P Investment $1.5 Bill (since 1992)

Resulting 900 MMcfd production

Total PB E&P Investment $0.05 Bill (since 1990) Resulting 15 (30) MMcfd production

Lack of funding and latitude under the present mode of operation do not allow PB to react and rectify market imbalance like a true energy company on an emergency basisIf the commercial framework of gas business is not corrected, Petrobangla will never be able to supply gas reliably

Page 19: Epls Presentation

PSC Gas (December 2007)

10666:340.44(0.3)

Sep ‘10161Bangura2008

13671:293.1(2.4)

Mar ‘10405Bibiyana2007

9149:500.45(0.36)

Recovered100M’bazar2005

5730:701.19(0.84)

Mar ’03217Jal’bad1999

16280:201.03(0.84)

Ongoing660Sangu1998

Gas PriceTk/Mcf

Cum gas shareIOC:BD

Reserve(Rec) tcf

Cost Recvy yr

Cap InvstMill US$

Page 20: Epls Presentation

Petrobangla Reality

OLD GAS vs. NEW GAS90% of present PB gas was bought from Shell at US$ 10 million(!) in 1975 Old Gas – less than $ 0.10/Mcf (!) Cost of finding new gas from Green Fields

BAPEX Tk. 65/Mcf (wellhead) IOCs Tk. 70 – 110/ Mcf (wellhead) Adding Proc, Trmn, Distbn (Cost+ price is Tk 140/Mcf)

PB Weighted Ave price Tk. 93/Mcf

Minimum cost of import Tk. 500/Mcf !

Page 21: Epls Presentation

Chronology of World and Bangladesh Gas Price

6508.065.0069.00- 10.81.0763.473.912007

1753.326.7858.15+1.71.2060702003

1703.226.2052.140.01.1854.662.92000

501.814.7440.25+11.31.1841.347.51994

1352.520.4535.80+112.01.0632.837.91990

5803.427.5331.00+6.30.5015.615.61985

8304.435.6916.25+2.10.477.757.71980

1701.310.4108.080.463.723.71974

Saving %

Eqv gas price, $/Mcf

Oil price$/bbl

Exchange rate Taka/$

Gas Price (power) change %

Gas Price (Power) $/Mcf

Gas Price (Fertilizr) Tk/Mcf

Gas Price (Power) Tk/McfYear

Page 22: Epls Presentation

What to Do?

Page 23: Epls Presentation

Gas Reserve Vs Production (As of December 2007)

21.265

7.69185.4711

7.987.42

15.4035

0

5

10

15

20

25

PossibleRecoverable

ProbableRecoverable

ProvenRemaining

Production ProvenRecoverable

Proven

Gas in TCF

>9

0%

40-80%

<4

0%

Page 24: Epls Presentation

Current Reserve Categories –Supply Demand Balance

0

1000

2000

3000

4000

5000

6000

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025G

as m

mcf

d

Proved Probable Possible Case B Demand

Shortfall would commence in 2011 against Proved ReservesShortfall would commence in 2011 against Proved Reserves

Ref: GSMP 2006

Page 25: Epls Presentation

0

5

10

15

20

25

30

35

40

45

50

PAST PRESENT FUTURE

Gas

in T

cf

Resources Reserves

0.6 Tcf/year

Used up to 20077.4 Tcf

Bangladesh Floating on Gas!

13.4 tcfRemaing

32 tcfPotential(50%)

Page 26: Epls Presentation

Expected Augmentation (short term)

Based on Proven reserve and new drilling

175 MMscfd115 MMsfd165 MMscfd(85 Wkover +80 Cap addn)

2010-112009-102008-09

Page 27: Epls Presentation

Production Augmentation Production Augmentation Activities (Long term) Activities (Long term)

Cairn

Total EP & JV

Cairn-Chevron

Company

200Nov ’08 – June

‘12

Exploration in Block # 5,7,10

100Nov ’08 – June

‘12

Exploration Drilling of Magnama & Hatiya Structure

300 - 5002009-2016

Bangladesh Offshore Bidding Round 2008

50 - 100Nov ’08 – June

‘12

Exploration in Block # 17 & 18 (3-D Seismic followed by exploration drilling)

Production

MMSCFDPeriodPrograms

Page 28: Epls Presentation

Transmission Projects under Implementation

30”x235km

ADBDec 2011Ashuganj-BKB-CTG Trans. Pipeline(under active consideration of ADB)

30”x60kmWBJune 2010Bakhrabad – Siddirganj

24”x14kmADB/GOBJune 2010Pipeline from Titas field to A-B pipeline

20”x165km

ADBJune 2011Bheramara-Khulna Pipeline

SizeFunded ByCompletion Time

Projects

12”x51kmADBJune 2009Bonpara-Rajshahi Pipeline

30”x87kmADBJune 2010Hatikamrul-Ishwardi-Bheramara Pipeline

10000 hpADBJune 2011Elenga Compressor

Expansion to West Zone

BB Corridor Expansion

30”x51kmADBJune 2009Monohordi-JMB East Loopline

18000 hpADBDec 2011Ashuganj Compressor Station

12000 hpADBDec 2011Muchai Compressor Station

North-South System Expansion

Page 29: Epls Presentation

CT Gov Measures3D Seismic of 5 major PB gas fields to be completed by 2011 may add 5 tcf of probable reserve to the systemWith gas price increase, at least 1 tcf of thin bed reserve within PB fields will be commercially viableBAPEX was granted $0.5 billion to be self supporting in seven years (highest in Bangladesh history) Launched 3rd round offshore biddingActively pursued to vacate the onshore exploration moratorium imposed by the high courtTried to resolve all disputes with the IOCsTried to formulate coal policy

Page 30: Epls Presentation

Power

The key to power is available and diverse primary energy

Generally, funding and management can resolve power problem

Page 31: Epls Presentation

POWER INDICATORS

137 kWhPER CAPITA CONSUMPTION

1 : 5 : 3.5 :2.5BD:IND:PAK:SL4500 MWSUMMER PEAK DEMAND

700-900 MWPOWER SHORTAGE

3600-3800 MW

PEAK GENERATION

40%ACCESS TO ELECTRICITY

STATUSINDICATORS

Page 32: Epls Presentation

PRESENT POWER SITUATION

GENERATION CAPACITY

361247625232TOTAL135214541454IPP226033083778PUBLICMWMWMW

AVAILABLE CAPACITY

(AS ON 08 APR 08)

DE-RATED CAPACITY

INSTALLED CAPACITY

TYPE

Maximum generation in history - 4130 MW

Page 33: Epls Presentation

Fuel Mix of Power generation

Page 34: Epls Presentation

Facts2000 power sector master plan forecasted 5000 MW peak demand for 2007Only 80 MW power was added during 2001-2006 periodPresently 400-500 MW stranded capacity due to gas supply limitation300-400 MW F/S and maintenance150-180 MW short in Kaptai due to water shortageWhy gas shortage now?

It was always there. It has been exposed now due to power plant availability by last year’s maintenance and management effortRapid decline of Sangu fieldBetter performing fertilizer sectorUnusual growth in CNG and captive power gas demand in a very short span (2006-07)

Page 35: Epls Presentation

Better but Not Good Enough(generation)

12033763256June

8134123331May

24036173376April

66037733113March

81035032693February

Diff (MW) 2008 (MW) 2007 (MW)

Page 36: Epls Presentation

Measures by the CT GovThrough maintenance and Rehab, added 600 MW in 2007-08Capacity addition in 2007-09

Plants commissioned 422 MWNew Contracts signed 1100 MWContracts in process 1400 MW

(Based on time bound (2008-2011) gas guarantee with some uncertainty)

NO MORE gas based power plants from existing reserveDemand management

Efficiency – promoting CFLConservation – Low usageTime shifting – Holiday staggering, Shopping hour Lifestyle motivation – Media campaign

Page 37: Epls Presentation

System Loss (w/o transmission)

14.53

20.53

13.44

12.39

16.58

2006-07%

13.0813.4WZPDCo

18.5819.03DESA

10.9210.62DESCO

14.314.07REB

14.5414.72PDB

Up to Apr ’08 %

2007-08%

Distn Cos.

Revenue increased by 1300 crore in 2007 over 2006(Average system loss reduction of 2%)

Page 38: Epls Presentation

Other Measures by CTGOpen merchant power generation for private purchase (own fuel and market) Opening state gridlines for private use based on open access rulePublic-private partnership for all infrastructure (mainly generation) Coal based power (coal policy to be approved) Renewable energy policyConservation act (in progress)Gas act (waiting final cabinet approval)Nuclear power

Page 39: Epls Presentation

Way Forward

Page 40: Epls Presentation

Power Sector Master Plan

• Base plan for growth from 22,000 GWH to 100,000 GWH by 2025 calls for an additional 17,700 megawatt (MW) of generating capacity to be installed by 2025. Will require significant investments, likely billions of dollars.

Current : ~22000 GWH

Target 100,000 GWH by 2025

Page 41: Epls Presentation

Go Coal for Power Generation!Reserves in Bangladesh

3906.68119-506Barapukuria, Dinajpur(1985) 1.

57230.00150-240Phulbari, Dinajpur(1997) 3.

143(GSB), 685(Hosaf) 12.00257-483Khalaspir,

Rangpur(1995) 2.

1,05016.00900-1000Jamalganj, Jaipur(1965) 4.

200 (partly evaluated)

Yet to be Known327Dighirpar,

Dinajpur(1995) 5.

No.

Total

Place/Field(Discovery)

2,897

Proven Reserve(Million Ton)

Area(Sq. Km)

Depth(Meter)

Page 42: Epls Presentation

A Probable Coal Consumption Scenario

1000 million tons (1 billion ton) 2014 1000 MW 3 m t 2015 1000 MW 2000 MW 6 m t 2016 1000 MW 3000 MW 9 m t 2017 1000 MW 4000 MW 12 m t 2018 1000 MW 5000 MW 15 m t 2019 1000 MW 6000 MW 18 m t 2020 1000 MW 7000 MW 21 m t 2021 1500 MW 8500 MW 25 m t 2022 1500 MW 10000 MW 30 m t 2023 1500 MW 11500 MW 35 m t 2024 1500 MW 13000 MW 39 m t 2025 1500 MW 14500 MW 43 m t 2026 1500 MW 16000 MW 48 m t 2027 2000 MW 18000 MW 54 m t 2028 2000 MW 20000 MW 60 m t 418 mill tons

Page 43: Epls Presentation

COAL – Electricity GenerationA COAL USE SCENARIO FOR BANGLADESH

0

10

20

30

40

50

60

70

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

YEAR

MIL

LIO

N T

ON

S

Page 44: Epls Presentation

Twenty Year Energy SecurityFind new gas, enhance existing productionRelease maximum gas from power production using coal fired generationPrioritize gas use for industry, CNG and fertilizerPromote LPG for cookingPromote renewables, especially bio-gas and solar for rural areasImmediate adjustment of all energy prices based on ANY rational formulaReform of organizational and commercial framework of energy business

Page 45: Epls Presentation

Bottom Line!

Energy Security doesn’t come in a separate package!So If we can’t manage our economy, affordability cannot

dictate reliable availability