Bangladesh is stepping up domestic gas exploration to address declining production and reduce its dependence on imported liquefied natural gas (LNG), with Petrobangla targeting the drilling and workover of 150 wells by 2030–31. However, disruptions to LNG supplies, mounting payment obligations and a persistent gap between demand and supply continue to put pressure on the country’s energy sector.
In an interview with Just Energy News Editor Md Shamim Jahangir, Engr. Md. Shoyeb, Director of Operation and Mines at Petrobangla, discusses the causes of the current gas crisis, the government’s plans to increase domestic production, prospects for offshore exploration, future gas allocation priorities, LNG infrastructure and efforts to reduce system losses caused by illegal connections.
Shoyeb says the completion of the planned wells will add significant volumes of domestic gas to the national grid and help reduce LNG import costs. He also reports growing international interest in Bangladesh’s offshore bidding round and says Petrobangla wants to bring gas distribution system losses close to zero.
Full interview
Md Shamim Jahangir: Petrobangla is facing multiple challenges, particularly in the gas sector, where shortages have forced the authorities to ration supplies. How are you dealing with the crisis?
Engr. Md. Shoyeb: Petrobangla has undertaken a programme to drill and work over 150 wells by 2030–31. We have already completed drilling and workover operations on 30 wells and added the gas produced from them to the national grid.
We expect the completion of all 150 wells to add a substantial volume of gas to the national grid. At the same time, the programme will help reduce our expenditure on LNG imports.
Md Shamim Jahangir: That is a medium-term plan, with results expected over the next four years or so. What steps are you taking to address the immediate gas crisis?
Engr. Md. Shoyeb: As you know, we had arrangements for both long-term and short-term LNG supplies. However, around 43 LNG cargoes from long-term and short-term suppliers were cancelled following the conflict in the Middle East and disruptions associated with the Strait of Hormuz.
We tried to procure replacement cargoes quickly through tenders, but faced some difficulties in the process. Had these disruptions not occurred, we had hoped to maintain gas production and supply at the levels we were targeting.
Md Shamim Jahangir: Petrobangla’s medium-term plan up to 2034 reportedly anticipates a significant decline in domestic gas production. How do you plan to compensate for the depletion of existing reserves?
Engr. Md. Shoyeb: Yes, you are correct. That is one of the reasons we have undertaken the programme to drill and work over 150 wells.
In addition to the gas expected from these wells, we are pursuing offshore exploration. We have already invited bids under the offshore bidding round. If we can attract companies to explore the blocks on offer, we expect to see results from offshore exploration around 2030–32.
Md Shamim Jahangir: What kind of response have you received to the offshore bidding round so far?
Engr. Md. Shoyeb: This time, we have taken extensive measures to attract international oil companies (IOCs). Eight companies have already purchased information packages, while two have purchased the tender documents.
We are continuing various initiatives to make the bidding round successful. These include promotional activities abroad to encourage international oil companies to participate in Bangladesh’s offshore exploration programme.
Md Shamim Jahangir: Bangladesh is experiencing a substantial gas supply shortfall. During rationing, which sectors receive priority, and which have to manage with reduced supplies?
Engr. Md. Shoyeb: We have consistently followed a priority-based allocation system. Electricity generation receives the highest priority, followed by fertiliser production. Industrial plants and captive power generation come next, followed by commercial consumers and other industrial users.
Md Shamim Jahangir: We understand that Petrobangla intends to give greater priority to industry under its future gas allocation policy. Is that correct?
Engr. Md. Shoyeb: Absolutely. We want to direct gas towards the industrial sector because it is a key priority for us.
Supplying gas to industries helps create employment within the country and reduces our dependence on imports. That is why we want to ensure that gas allocation supports domestic industrial activity and economic growth.
Md Shamim Jahangir: The conflict involving Israel and Iran has also increased pressure on energy subsidies. How are the rising subsidy requirements and outstanding payments affecting LNG imports and payments to international gas companies?
Engr. Md. Shoyeb: Outstanding payments certainly create difficulties in making payments for gas supplied by international oil companies and for LNG imports.
In this regard, we receive subsidies from the Ministry of Finance and try to settle the outstanding payments using the funds provided.
Md Shamim Jahangir: As part of the long-term plan, Bangladesh has considered developing two floating storage and regasification units (FSRUs). One proposed project has faced a dispute, and the Prime Minister recently referred to the cancellation of an FSRU project under a previous administration. Will Petrobangla revive that project, and how will the dispute be resolved?
Engr. Md. Shoyeb: We do not want to comment on the court matter at this stage. We will take action in accordance with the court’s directions.
Separately, we are working on establishing another floating LNG terminal.
Md Shamim Jahangir: Are negotiations with the Chinese company CNOOC still under way for the proposed terminal?
Engr. Md. Shoyeb: The matter has not been finalised yet.
Md Shamim Jahangir: Let us turn to gas distribution. Since taking charge of operations alongside your responsibilities for production-sharing contracts, you have emphasised a zero-tolerance approach to system losses. How are you implementing this policy?
Engr. Md. Shoyeb: As you know, six gas distribution companies operate across different regions of the country. We set targets for each company, and they work to reduce system losses accordingly.
System losses include gas lost through illegal connections and pipeline leaks, among other causes. Our distribution companies are generally maintaining the targets we have set, although there may be minor problems in one or two areas.
Overall, they are making progress in reducing system losses. We hope to bring the system close to a break-even point within a year.
Md Shamim Jahangir: What level of system loss are you targeting?
Engr. Md. Shoyeb: Our objective is to bring system losses as close to zero as possible.
Md Shamim Jahangir: In my years of journalism, I have come across concerns about meter tampering and gas theft by industrial plants and other establishments. How are you addressing these problems?
Engr. Md. Shoyeb: I would not say that meter tampering and theft by industrial plants are the principal causes of system losses. In most cases, the losses stem from illegal connections.
For example, Titas Gas supplies consumers not only in urban areas but also in remote locations, where many illegal connections exist. We have observed that illegal connections are more prevalent in some lower-income communities, particularly in remote areas. These connections contribute to higher system losses.
Md Shamim Jahangir: At what level would system losses become almost negligible?
Engr. Md. Shoyeb: We want to bring them as close to zero as possible. That is our goal, and we are working towards achieving it.
Md Shamim Jahangir: Finally, business owners are warning that gas shortages could force them to shut down operations, while households are also struggling to obtain adequate supplies. Bangladesh has experienced gas shortages before, but the current crisis has attracted considerable attention. What is the main reason, and how do you plan to overcome it?
Engr. Md. Shoyeb: The main reason for the recent deterioration is the sudden disruption to LNG supplies, which has brought the issue into sharper focus, including in the media.
If we can restore LNG supplies to full capacity and deliver gas at around 2,700 million cubic feet per day, we expect the situation to improve.
Md Shamim Jahangir: Even at that level, there would still be a shortfall of around 1,100 million cubic feet per day.
Engr. Md. Shoyeb: Yes, even then there would be a shortfall of around 1,100 million cubic feet per day. However, we have a structured gas rationing system in place and are managing supplies accordingly.
Md Shamim Jahangir: Engr. Md. Shoaeb, thank you for joining us and sharing your views with Just Energy News.
Engr. Md. Shoyeb: Thank you.