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BackgroundLast Ten YearsPresent StatusWas Petrobangla sleeping?Petrobangla LimitationWhat to do?POWERWay Forward
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%
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
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
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
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)
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
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
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!
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
Was Petrobangla Sleeping?
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
Production Increase Between 2007 and 2008
17701644Jun17541646May17571644Apr16861574Mar15721496Feb16711407Jan
20082007Month
AVERAGE DAILY GAS PRODUCTION (MMCFD)
Avge increase of 120 MMcfd was mostly used by non-bulk
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
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
Petrobangla Limitation
Petrobangla LimitationTotal IOC E&P Investment $1.5 Bill (since 1992)
Resulting 900 MMcfd production
Total PB E&P Investment $0.05 Bill (since 1990) Resulting 15 (30) MMcfd production
Lack of funding and latitude under the present mode of operation do not allow PB to react and rectify market imbalance like a true energy company on an emergency basisIf the commercial framework of gas business is not corrected, Petrobangla will never be able to supply gas reliably
PSC Gas (December 2007)
10666:340.44(0.3)
Sep ‘10161Bangura2008
13671:293.1(2.4)
Mar ‘10405Bibiyana2007
9149:500.45(0.36)
Recovered100M’bazar2005
5730:701.19(0.84)
Mar ’03217Jal’bad1999
16280:201.03(0.84)
Ongoing660Sangu1998
Gas PriceTk/Mcf
Cum gas shareIOC:BD
Reserve(Rec) tcf
Cost Recvy yr
Cap InvstMill US$
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 !
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
What to Do?
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%
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
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%)
Expected Augmentation (short term)
Based on Proven reserve and new drilling
175 MMscfd115 MMsfd165 MMscfd(85 Wkover +80 Cap addn)
2010-112009-102008-09
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
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
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
Power
The key to power is available and diverse primary energy
Generally, funding and management can resolve power problem
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
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
Fuel Mix of Power generation
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)
Better but Not Good Enough(generation)
12033763256June
8134123331May
24036173376April
66037733113March
81035032693February
Diff (MW) 2008 (MW) 2007 (MW)
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
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%)
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
Way Forward
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
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)
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
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
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
Bottom Line!
Energy Security doesn’t come in a separate package!So If we can’t manage our economy, affordability cannot
dictate reliable availability
