Ambitious, unrealistic plan puts country’s energy quest in dilemma: Experts

Dhaka, Mar 8 (UNB) – The country is likely to face a grave uncertainty in meeting its energy needs as the government has failed to implement a “highly ambitious and unrealistic” plan, according to experts.

After assuming office in 2009, the Awami League government adopted a mega plan to increase the energy supply by enhancing local gas production as well as by import of liquefied natural gas (LNG) and pipeline gas.

At present, electricity generation in the country is nearly 6,500 MW compared with the demand for over 7,500 MW, while gas supply is around 2,250 million cubic feet per day (mmcfd) against the demand for over 2,700 mmcfd. The energy demand in the country is increasing with the 6-7 percent economic growth.

To meet the growing energy demand, the government planned to increase power generation to 13,000 MW by 2015.

As part of the strategy to increase energy supply, the government announced in 2010 that it will import 500 million cubic feet per day (MMCFD) gas from Qatar within next two years.

Accordingly, it signed a memorandum of understanding (MOU) with the Qatar government and invited an international tender to set up an LNG terminal at Maheshkhali Island in Cox’s Bazar district. The government’s plan was to use the terminal on rental basis and after 15-year of operation, the private firm will hand over the terminal to the government.

Alongside the terminal project, it undertook a project to install 90 km gas pipeline from the LNG terminal to the port city of Chittagoing.

After a long delay, the government invited the tender in 2010 to set up the LNG terminal in the private sector. Three firms submitted bids for the project, but only USA-based Astra Oil and Excelerate Energy’s offer was initially found responsive.

However, when the state-owned Petrobangla examined the offer in detail, it found the offer financially unviable and very costly for the country. Finally, the Petrobangla rejected the Astra Oil and Excelerate Energy’s offer.

“The conditions of the Astra Oil and Excelerate Energy did not match with the government’s Request for Proposal (RFP) set for the bidding,” Petrobangla chairman Dr. Hussain Monsur told UNB following the breakdown of negotiation with the American company.

He said the American consortium wanted credit facility from the government to implement the LNG terminal project, which is not acceptable.

Now, the Petrobangla is considering inviting a fresh tender to implement the LNG terminal project. But energy experts are highly critical of such a plan as they found it “highly ambitious and unrealistic.”

Former Special Assistant to the Chief Advisor of the caretaker government Dr. M Tamim said the LNG import plan has never been a financially viable project as the import price of gas will be more than US$ 15 per 1,000 cubic feet (MCF) gas, which is not affordable for Bangladesh.

“I was totally skeptical about the LNG terminal and import plan as it was an eyewash project,” he said.

This is “highly ambitious and unrealistic,” said Dr. Tamim, a Professor of Petroleum and Mineral Resources Engineering at the Bangladesh University of Engineering and Technology (BUET).

He suggested the government to concentrate more on offshore and onshore exploration and drilling by both local and foreign companies to find a quick solution as this is the only available option.

The officials of the state-owned Power Development Board (PDB) have become frustrated with no-breakthrough in LNG import.

PDB’s director (planning) Mizanur Rahman said the PDB was becoming hopeful of finding a solution to the nagging gas crisis at its power plants in the Chittagong region following the government’s move for LNG import.

“But now we don’t see any near-future solution to the gas crisis that impedes 550 MW power generation by the plants in Chittagong,” he added.

Source: UNBConnect

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