Onshore Gas: Hardly any unexplored gas left
Bangladesh does not have much unexplored onshore gas that the country can draw upon, said Nasrul Hamid, the state minister of power, energy and mineral resources.
"Once upon a time it was said that there is a lot of gas potential in our country -- that is a tale from 2001," he said yesterday in a session titled "Strategic Approach for Energy Security to Attain Sustainable Growth" at the Bangladesh Business Summit.
During the Awami League government's tenure, gas production increased, but the demand is much higher.
"This is the main reason why we need to import gas. The sea is one of the potential sources of gas. But we tried to invite international companies to explore there. They didn't agree due to the low price of gas," he added.
Hamid's comments came in response to businessmen's demand for uninterrupted gas supply and more gas exploration.
"Last year, all of a sudden, we faced a shortage in gas and the reason for the crisis was we did not want to use our local resources," said Mahabubur Rahman, former president of the Federation of Bangladesh Chambers of Commerce and Industry.
No company -- foreign or local -- were appointed for onshore or offshore gas exploration.
"Decades ago, an American company said that we have huge gas -- they pressured us to explore it and export. But the government didn't agree. After some years, they are saying that we have no gas. We should fully utilise our local resources," Rahman added.
Golam Md Alamgir, chairman of Max Group and an FBCCI director, echoed the same.
"We are keeping our dollars under the ground and buying gas from outside by spending dollars. Due to the negligence of Bapex [Bangladesh Petroleum Exploration and Production Company], brilliant officers are going abroad. Bapex could have been a big company in the world and earned dollars. But we didn't invest in them properly," he added.
Summit Group chairman Aziz Khan called for a lower cost of funds to attract more investment in the power and energy sector.
"A window in Bangladesh Bank for lower interest for long-tenure loans and tax incentives should be provided for capital-intensive projects to nullify the extreme volatility in this market," he added.
For energy security, he called for private sector investment in upstream liquefaction facilities and liquefied natural gas storage as well as LNG carriers in foreign gas-producing countries and companies.
"This would enable us to get equity gas at a relatively lower price," he added.
Deepesh Nanda, chief executive officer of GE South Asia, shared his experience investing in the country.
"Our investment was not possible without the support of the government with a solid policy framework."
In the case of a combined cycle power plant, the natural gas was made a pass-through. That means the risk of the fuel was on the state.
The power plant had a power purchase agreement that had a guaranteed fixed capacity payment for 22 years. The payments were guaranteed by the government and power ministry through a sovereign guarantee and the PPA was denominated in US dollars.
"It became impossible for any international investor to find fault as to why we should not be investing in Bangladesh," Nanda added.
Md Abul Kalam Azad, former principal secretary of the prime minister, presented the keynote paper where he also emphasised on properly utilising the local resources, including gas and coal.
Power Secretary Habibur Rahman presided over the session.
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