Bangladesh would require discovering at least 1.5-2 Tcf of gas from onshore blocks by 2030 as present onshore proven reserves may completely deplete by then
Bangladesh needs to adopt rational and affordable fuel mix for achieving the SDG7 target of sustainable and quality modern power supply to all at affordable cost.
Sustainable energy security is a must for achieving envisioned economic development and it can only be achieved through ensuring sustainable supply of primary fuel for energy generation.
The Bangladesh government under the farsighted, courageous leadership of Prime Minister Sheikh Hasina has achieved significant milestones in power generation over the past 12 years. The days of chronic load shedding due to acute crisis in power generation has been successfully overcome with significant surplus generation capacity.
However, the commendable success in power generation could not be matched by required expansion and modernisation of power transmission and distribution segments. The success of power sector has also been eclipsed to some extent due to noticeable failures in energy sector – the failure of Petrobangla and its companies in ensuring smooth supply of required primary fuel.
While power generation has more than quadrupled over the past 12 years, Petrobangla companies could not carry out the required exploration and development of petroleum resources at onshore and offshore sites during this period. Petrobangla could not engage international oil companies (IOCs) through production sharing contract (PSC) bidding rounds for exploring petroleum resources in offshore (deep and shallow water) sites despite successful resolution of maritime boundary disputes with Myanmar and India.
The government also failed to make political decisions to extract significant volumes of superior quality coal lying at mineable depth. Petrobangla also delayed importing LNG for five years. Consequently, a significant portion of available capacity of gas-based power generation remains idle, forcing the Power Development Board (PDB) to rely on liquid fuel-based expensive rental and quick rental plants.
The major changes in fuel mix prescribed in the Power System Master Plan (PSMP) 2010 and PSMP 2016 also evidenced that even master plans are approved in Bangladesh without detailed techno-economic feasibility studies and risk analysis. Fuel mix target of PSMP 2010 could not be achieved while the target of PSMP 2016 now appears unachievable.
For the miserable failures of Petrobangla and the Energy and Mineral Resources Division (EMRD), Bangladesh's power and energy sector is increasingly becoming exclusively dependent on imported fuel. Experts observe that long-term energy security will enter the zone of uncertainty unless a rational and affordable fuel mix is adopted and an all-out mission for extraction of own primary fuel is executed in a coordinated manner.
Fuel mix prescribed in PSMP 2010, PSMP 2016
In the wake of the depleting scenario of our own discovered gas reserves, the PSMP 2010 prescribed 50 percent contribution of coal for achieving 40,000MW power generation capacity by 2030. Twenty-nine percent contribution was prescribed from own discovered coal reserves, and 21 percent from imported coal.
But the government failed to make political decisions for extracting own coal, though technically and economically, own coal remained the best option for about 10,000MW mine mouth power generation for 50 years. Petrobangla and the EMRD also failed to carry out required exploration of own petroleum resources.
Between 2010 and 2015, the government relied to a great extent on imported liquid fuel-based (furnace oil- and diesel-based) power generation. In the meantime, gas reserve further depleted.
PSMP 2016 completely revised fuel mix, prescribing 35% (34% imported) contribution from coal for 60,000MW power generation capacity by 2041, 35% from own gas and imported LNG and 30% from nuclear, power import and renewable. Grappling with the challenges of import infrastructure development for coal and LNG over the past five years and appreciating the challenges of fuel import from global market impacted by regional and global geopolitics, the Bangladesh government once again is reviewing PSMP and fuel mix.
Status of own primary fuel: Natural gas
Bangladesh's onshore and offshore areas are divided into 48 exploration blocks. 26 blocks are in the offshore (the Bay of Bengal – 11 in shallow water and 15 in the deep offshore) area, and 22 in the onshore area. The above map shows the blocks already explored, under exploration and the ones that are unexplored.
The government may not provide any new gas connection to domestic and commercial consumers and may stop supplying gas for captive power generation.
Challenges of reliance on imported fuel
Bangladesh's coal area is shallow. Several rivers originating from India and Nepal carry huge silt as they flow through Bangladesh and deposit along the Bangladesh coast. Drafts at Chattogram, Mongla and Payra ports (six to eight metres) are not enough for standard coal ships (Capesize, Panamax, Supramax) and LNG carriers carrying coal and LNG in bulk.
Only the under development port at Matarbari in Cox's Bazar - connected with deep water through under excavation 14km long, 250 meter wide 18 meter deep link canal - would be suitable for coal and LNG import. For the turbulent nature of the Bay of Bengal, transshipment from large ships anchored in deep water is also not feasible for more than seven to eight months every year.
Moreover, regional and global geopolitics and pandemics make global fuel market volatile and cause supply chain disruptions. So, exclusive reliance on imported fuel may create vulnerability to sustainable energy security both in terms of fuel availability and price.
Suggestions and recommendations
We require a rational fuel mix of own and imported fuel in recognition of fuel import challenges and huge investment requirements for developing fuel import infrastructure. Bangladesh must explore its own discovered coal resources applying state-of-the-art technology addressing environmental and social impacts, set up mine mouth coal power plants, and expedite exploration of petroleum resources at onshore and offshore sites by engaging IOCs through a transparent bidding process.
The capacity of Bapex must be objectively assessed and strategic partners may be selected through a transparent process for working at challenging onshore structures. For working in onshore frontier areas and deeper horizon of discovered fields, Bangladesh should invite a fresh bidding round for PSC.
Bangladesh would require discovering at least 1.5-2 Tcf of gas from onshore blocks by 2030 as present onshore proven reserves may completely deplete by then. The country must also develop at least one large enough land-based LNG terminal at Matarbari (2,000 MMCFD capacity) and floating storage regasification units (FSRUs) at Payra offshore (1,000 MMCFD) for securing fuel supply by 2030 and beyond. In the meantime, IOCs must be engaged at offshore, including deep water.
Bangladesh must also review energy trading with neighbouring Myanmar and India. The prospect of joint development of petroleum prospects of adjacent offshore blocks in the Bay of Bengal must be explored.
For all of the above, the capacity and governance process of Petrobangla and its companies must be objectively assessed. These should be restructured with competent line professionals for dealing with challenges.