Businesses have shown limited interest in utilizing the surplus gas in Bhola through liquefied natural gas (LNG) due to high costs, prompting authorities to consider alternative transmission methods, including a proposed pipeline from Bhola to Dhaka via Barishal.
“We offered LNG from Bhola to 160 industrial units in Dhaka, but most of them proposed extremely low tariffs that do not reflect the actual cost,” a Petrobangla official told Just Energy News.
Currently, gas from Bhola is being transported to Dhaka in compressed natural gas (CNG) form.
LNG: High Costs, Low Demand
According to Petrobangla officials, converting Bhola’s gas to LNG, transporting it to Dhaka, and then reconverting it for industrial use would cost approximately Tk 47.60 per cubic meter. However, most business leaders are only willing to pay between Tk 30 and Tk 40 per cubic meter.
A Petrobangla official, speaking on condition of anonymity, said representatives from key business associations—including FBCCI, BGMEA, BKMEA, and BTMA—attended consultations and initially welcomed the initiative. However, interest waned once the projected costs were disclosed.
Following these meetings, Petrobangla sent formal proposals to 160 industrial units seeking their feedback. The response was lukewarm, with only a few expressing interest, and only one entrepreneur agreeing to the estimated Tk 50 tariff.
At least nine local and international firms expressed interest in supplying up to 30 million cubic feet per day (mmcfd) of gas from Bhola, converted to LNG, for industries under Titas Gas Transmission and Distribution Company.
From this pool, four companies have been shortlisted: Gazprom EP International Investment BV, CNPC Chuanqing Drilling Engineering Company Ltd. (CDECL), China National Machinery Import & Export Corporation (CMC) and An unnamed Singapore-based firm.
Petrobangla’s Director of Operations and Mines, Engineer Md Rafiqul Islam, told Just Energy News on Sunday that the LNG initiative remains complex. “We have yet to receive financial proposals from the interested companies, so it’s difficult to finalize transportation cost estimates,” he said. “However, costs may be comparable to the current CNG transportation system.”
Currently, Intraco Group transports around 5 million cubic feet of Bhola gas to Dhaka daily in CNG form, at a retail price of Tk 47.60 per cubic meter. Of that amount, Tk 17 goes toward government fees and taxes.
Existing Industrial Gas Tariffs
At present, older industries pay Tk 30 per cubic meter of gas, while new factories pay Tk 40. For captive power generation, older units pay Tk 31.50, and newer ones pay Tk 42 per cubic meter.
Pipeline Project Gains Momentum
In light of the challenges surrounding LNG transport, the Energy Division is moving forward with a pipeline alternative. The interim government has finalized the Bhola–Barishal–Dhaka route, replacing the previous Bhola–Barishal–Khulna alignment proposed by the former Awami League administration.
While the Bhola–Barishal segment has already been surveyed, a contractor was recently appointed for the pre-feasibility study of the Barishal–Dhaka section. The pipeline project is expected to cost approximately Tk 2,600 crore and could take at least four years to complete.
Bhola’s Untapped Gas Potential
Bhola, an island district in southern Bangladesh, has two gas fields with nine operational wells capable of producing up to 190 million cubic feet of gas per day. However, due to limited demand, only 70–80 million cubic feet are currently being extracted daily.
Petrobangla plans to drill 15 additional wells in Bhola, which could raise daily production capacity by 300–400 million cubic feet. The district’s existing reserves are estimated at around 5 trillion cubic feet, and experts believe this could increase with further exploration.
Petrobangla has also expressed concern that annual extraction could reduce local reserves by 150 mmcfd if not managed carefully.