Petrobangla, the state-owned oil and gas company, has not made any plans to supply energy to Chittagong, the country’s commercial zone, although the authorities knew beforehand that production of natural gas from the Sangu gas field can cease any moment.
“No, we do not have any other alternative sources for supplying gas to the Chittagong zone as we do not have any extra gas that we can supply there,” Petrobangla chairman Dr Hossain Monsur told The Independent.
According to Petrobangla, the gas output from Sangu is dwindling and it has been producing only 3 to 4 mmcf per day for the last three days.
“Generation of electricity from the Shikalbaha 150-MW gas-fired power plant has already been hampered. We had earlier stopped gas supplies to Rawzan and other small plants, which had caused massive power cuts in Chittagong,” a Power Development Board (PDB) official said.
Petrobangla officials said because of the shortage of gas supplies, it has stopped gas supplies to all industrial units, except re-rolling mills, in Chittagong since last September.
“Yes, the closure of Sangu will exacerbate the shortage of gas supplies to the port city of Chittagong,” admitted the Petrobangla chairman.
Following depletion of gas in the Sangu gas field, Santos, which took over the field two years back from Cairn Energy, drilled three new wells in the field.
“Santos completed a USD 128-million three-well drilling programme in Block-16 in October 2011. Petrobangla agreed to the proposal, saying that it would be able to supply gas for the next two years. But now everybody can see what has happened,” an energy ministry official said.
But the most interesting aspect is that a section of the officials of the energy ministry committed a blunder by agreeing to Santos’ proposal to allow it to sell its gas to third parties, he said.
Santos obtained the right to sell its gas to a third party instead of Petrobangla through a new agreement, which it signed after carrying out negotiations prior to its fresh drilling in the Sangu gas field. Interestingly, Cairn sold its stake in hydrocarbon block-16 to Santos immediately after Petrobangla signed the amendment.
Santos started drilling exploration wells, but did not discover any commercially viable gas reserves in the first two wells it drilled — South Sangu-4 and North East Sangu-1.
Santos found commercially viable gas reserves in the well, though it is a very small one. However, it successfully signed an agreement with the PDB to sell gas at a rate of USD 4 per thousand cubic feet of gas.
Initially, Santos was supplying around 30 mmcfd gas, but after two to three months its production started to dwindle.
The US-based Shell Oil Company in 1997 discovered the Sangu field in hydrocarbon block-16 in the Bay of Bengal. It announced that the field had around 0.5 trillion cubic feet of recoverable reserves.
Later, Shell’s successor, Cairn Energy Bangladesh, redefined the recoverable reserves at around one trillion cubic feet and increased gas production to 220 million cubic feet a day. Later we all came to know that the figure was false, the official pointed out.
“But it initiated the sale of gas to a third party instead of Petrobangla. Through this agreement, Bangladesh is now obligated to allow the other international oil companies (IOCs) to sell the gas they obtain to any third party,” he added.
-With The Independent input
