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$ 500m new investment in gas sector by 2006
M Azizur Rahman
3/21/2005
The gas sector is expected to witness new investments worth over US$ 500 million by next calendar year as the government has asked all the oil companies operating in the country to enhance their production to meet the gas deficit, said sources.
Both the international oil companies (IOCs) and state-owned Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) have been asked to accelerate gas production to meet the growing demand for gas in the country.
Petrobangla sources said the country is experiencing a deficit of at least 100 million cubic feet per day (mmcfd) of gas.
Energy experts said the Unocal Bangladesh Ltd alone is planning to invest US$ 230 million by next year for developing gas fields and dig new wells.
The US Company, which is one of the largest foreign investors in the country's energy sector, has recently developed the Moulavibazar gas field.
The field will produce 70 mmcfd of gas and make available the same with the national grid.
Prime Minister Khaleda Zia is expected to formally inaugurate the gas field next month.
The company is also planning to develop the Bibiyana gas field to ensure additional production of 200-mmcfd gas by the first quarter of 2006, the external affairs manager of the Unocal told the FE.
The Cairn Energy is now investing around $52 million to develop three gas wells in the country's lone offshore gas field at Sangu.
The company sources said it has already developed one well out of three and started production of additional 30-mmcfd gas for the past few days.
The Sangu field is now producing 140 mmcfd of gas, he added.
The Canada-based Niko Resources is also going to invest around $15 million in next nine months' time, its Country Manager Brian Adolph told the FE.
The investment will be required for developing Chhatak gas field and installation of some pipeline, he added.
The company has already developed one abandoned gas field at Feni and is now adding some 40 mmcfd of gas to the national grid.
Tullow Bangladesh Ltd has also taken up a plan to develop Bangora gas field to ensure production from it shortly.
Sources said the company is expected to invest $15 million with in next year to conduct long-term testing there.
The state-owned BAPEX is now working at Srikail and Fenchuganj gas fields to enhance the country's gas production.
The company already found significant gas reserve at Srikail for exploration.
It also enhanced around 20 mmcfd of gas production from Fenchuganj field recently, the company sources said.
The BAPEX is investing over $200 million for these projects.
The company has also taken up the contract for drilling of well nos. 5 and 6 of Kailastila and well nos. 15 and 16 of Titas, a senior official of BAPEX told the FE.
Petrobangla Chairman SR Osmani said he is satisfied with the current pace of investment by the IOCs and the BAPEX.
"The Petrobangla has instructed these companies to enhance gas production to cope with the increasing demand for gas," he said.
Energy experts said after experiencing almost a lull in foreign investments by the IOCs for several years in the country's gas sector, the IOCs have come up with fresh investment plans about a year back.
The raging debate over the issue of gas export was one of the causes for slow pace of investments by the IOCs during the past several years, they said.
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