Unsolicited deal for Indian company?

The authorities may award an unsolicited contract to an Indian company to build a medium-sized power plant in Bhola island that would run on gas from Shahbazpur gas field or on imported petroleum, according to a competent source in Power Development Board (PDB).

The Shahbazpur field is currently unable to supply enough gas to run a new 200 megawatt power plant that began commercial operation last year. The China- built Bhola power plant is currently producing and supplying 50 to 60 megawatt power to the national grid due to dearth of gas supply.

The Bhola plant requires about 30 million cubic feet per day (mmcfd) gas. But the Shahbazpur field, which is not connected to the national gas network due to its location, is presently producing 17 to 18 mmcfd. Five months back, it was producing three times more gas.

According to a senior Petrobangla official, the current situation resulted after one of the three gas-producing wells of the field stopped production.

“Work is underway to increase production,” the official said adding that Petrobangla has given assurance to the PDB about supplying gas to the proposed new plant.

Bangladesh petroleum exploration company (Bapex) had discovered the Shahbazpur gas field in Bhola in 1994. It remained largely unutilised as the island is not connected to the national gas grid. The Bhola plant was built last year at a cost of Tk 2,000 crore to utilise the gas, and it is using a power transmission line installed across the Meghna to supply power to the national grid.

Indian Shapoorji Pallonji Infrastructure Capital Company had been trying to hammer out a deal on a power project since 2014. Initially, it proposed to transfer an installed but unused power plant from Uttarakhand of India to Sirajganj. Early last year, the company initiated a move to set up the plant in Bhola using gas from the Shahbazpur field.

Though the PDB was reluctant to accept the proposal, its officials visited the plant in Uttarakhand and gave a conditional nod to the project in August last year.

By that time, Shapoorji Pallonji modified its plan (as the unused plant in Uttarakhand began operation) and proposed to build a new dual fuel 220 MW plant in Bhola.

Now the PDB has recommended awarding the new power plant under the special act for speedy implementation of power and energy projects to bypass the open tendering process.

“We have separate power tariffs for gas- and petroleum-based generation,” said a PDB high official. “If gas is available from Shahbazpur, the plant would run on gas. Otherwise, it would be an oil-based plant.”

The proposal to award this contract will be sent to the Cabinet Purchase Committee soon, he added.

The country's present daily demand is close to 8000 MW, while it now generates 7600 MW. The demand is expected to shoot up by several hundred megawatts within a couple of months.