Energy sector reeled from poor decisions in 2017

The Year 2017 was a big mess for the energy sector as it had taken two suicidal decisions by engaging a non-performing company in extracting onshore gas while giving a waiver related to accidents and disasters.
To make an easy entry for the company into country's gas sector, the State owned Petrobangla presented a false statement to the public that it (the company) discovered a new gas field at Bhola although it was a discovered field and producing gas for the past decade.
In 2012, the government engaged Gazprom instead of Bapex, citing the grounds that the Russian corporation would enable state-run Petrobangla to raise gas supplies by at least 225 million cubic feet per day from the 10 wells in a short span of time. However, Gazprom engaged a central Asian errant company to do this job. The company failed to do the job within the stipulated timeframe but the government once again permitted this company to drill other fields despite only 87 mmcfd gas generated from five Gazprom-drilled wells.
Also the government's waiver to foreign company has drawn flak since in the face of a disaster the country's gas fields will have bear the cost of new drilling equipments if those are damaged during operation , according to a document prepared by Bapex with the key features of the contracts signed secretly with Gazprom last May.
"All expensive measures taken by the government ultimately burden people with gas price hike and overall inflation contributed by gas price hike," Professor Dr. Samsul Alam said.
Gazprom completed the drilling task at a cost of Tk 154 crore, while one such well might have been drilled at a cost of less than Tk 70 crore by Bapex and about Tk 100-110 crore by other foreign companies, according to a Bapex report prepared for its board meeting in August 2017.
If we look into the issue of expansion programme of government for supplying gas to the people or calculate the people's opportunity to get gas at a cheaper rate than the scenario would be not rosy.
"Country's south and western part, including Barisal, Khulna, Rajshahi and Rangpur are facing disparity in the supply of natural gas despite huge prospects of industrialisation. According to energy and mineral resources division (EMRD), the Khulna region only gets 35mmcfd of gas against the requirement of around 364mmcfd," a senior official said.
Besides, Rajshahi and Rangpur division get only 72mmcfd of gas against the demand of 200mmcfd. The gas distribution data was shared recently at a meeting chaired by EMRD Secretary Nazimuddin Chowdhury in the Secretariat. The demand for natural gas in Barisal and Khulna divisions will increase to 400mmcfd in 2025 and 530 mmcfd in 2030.
The meeting observed that the supply of natural gas in the south and western part of the country is costlier than other regions as most of the gas fields are located on the other sides of the country. Besides, installation of pipelines also costs huge money to supply gas. Rapid industrialisation and installation of gas-based power plants have also slowed down the gas supply.
Another crucial task was completed by the energy division in 2017 that is taking decision of importing Liquefied Natural Gas (LNG) as the country urgently needs a huge quantity of LNG to mitigate the natural gas crisis.
Petrobangla said the rate of imported LNG will be Tk 27.97 per cubic meter, but the end cost will reach Tk 62.15 per unit after payment of supplementary duty and VAT. The country will use an estimated 4700mmcfd LNG gas by 2023-24.
The government plans to consume at least 2000mmcfd of imported LNG gas by installing four separate floating storage and re-gasification unit (FSRU) between April, 2018 and June, 2020. It expected to feed 1000mmcfd LNG gas by 2018 and another 500mmcfd between 2019 and 2020.
Following the government decision regarding LNG, over half a dozen of local and international companies have shown their keen enthusiasm to set up LNG based power plants in the country having combined capacity to generate 13,083MW of electricity under unsolicited deals.      
Of them, a number of local and international companies have already got nod from the government to install a series of LNG based plants. The companies included Summit, United Group, Indian Company Reliance, Japanese Company Mitsui and Co and German Company Siemens and several others group. Comparatively less experienced local firms Golar Power Ltd and Unique Group have also shown interests to enter into the power sector through implementing 1500MW and 1200MW LNG-based power projects respectively. Another local firm Anlima Textile Ltd also expressed its interest to set up 400MW LNG based plant.  On the other hand, Japanese Mitsui and Co. Ltd has shown interests to set up a joint venture power project with Coal Power Generation Company Ltd Bangladesh.
Indian Reliance Power Ltd and China Petroleum Pipeline Engineering Company Ltd have proposed to set up 3200MW and 1500MW LNG based plants at Moheskhali and Meghnaghat respectively.
The gas tariff might see an increase between Tk 1.83 and Tk 19.70 per cubic meter at different consumer levels after the import of costly liquefied natural gas at $7 per mmcfd from next year, Petrobangla informed.
"Petrobangla have taken a move to use money from the Tk 70 billion Energy Security Fund to meet the import cost of liquefied natural gas (LNG). In 2017, the Bangladesh Energy Regulatory Commission, allegedly under government pressure, raised average retail prices of natural gas by 17.55 per cent, up from Tk 6.38 to Tk 7.50 per cubic metre, in two phases - on March 1 and June 1. The commission also raised the average retail prices of electricity by 5.3 per cent, up from Tk 6.49 to Tk 6.84 per unit or kilowatt-hour, at the consumers' end with effect from December 1. Now the question comes how the government mobilizes the money in this sector at what cost," Professor Dr. Samsul Alam asked.
According to him the country may face chaos in the energy sector after the election which will be the outcome of wrong decisions and a huge energy cost.