The country’s recoverable natural gas reserves are projected to be depleted within the next seven years unless significant new discoveries are made soon, according to officials.
This looming depletion is expected to have a major negative impact on the country’s industrial productivity and could slow down overall economic activities.
“We currently have only 8.66 trillion cubic feet (tcf) of recoverable gas from our 29 existing fields, of which 20 are producing, nine are non-producing, and five are suspended,” a presentation from Petrobangla suggests.
The presentation highlighted that the 20 producing gas fields have a total capacity to produce 7.32 tcf.
“Based on the current extraction rate of one trillion cubic feet per year, the supply will last for less than seven years unless new gas discoveries are made,” it said.
The presentation was made last week to the country’s top experts at the Ministry of Power, Energy, and Mineral Resources.
Currently, Bangladesh is supplying only 2,561 million cubic feet per day (mmcfd) of natural gas, against a demand of 4,000 mmcfd.
How Did This Happen?
Back in 2010, Bangladeshi experts predicted a decline in natural gas supply, warning that the situation could deteriorate from 2019 onwards, with supply potentially dropping to 1,900 mmcfd from local gas fields. This prediction is now becoming a reality, as gas fields are currently supplying less than 2,000 mmcfd despite some small discoveries.
In response to these projections, gas production companies initially made plans for new investments. However, following the government’s decision to import Liquefied Natural Gas (LNG), these companies scaled down their plans for new gas exploration. The government has spent Tk 1,210 billion on LNG imports between 2018 and 2023.
In 2016-17, local gas fields produced over 2,700 mmcfd, but this has since fallen to around 2,000 mmcfd, leading to significant shortfalls for consumers.
What Needs to Be Done
The government now has no choice but to continue importing LNG to meet the growing domestic demand. However, negotiating lower LNG prices is crucial.
An energy expert suggested that while focusing on LNG imports, the government should intensify onshore and offshore exploration, possibly involving international oil companies (IOCs) like Chevron Bangladesh and others.
“I have little faith in local companies, as they produce less compared to IOCs, especially when considering well-based production,” the expert said. For instance, Titas gas field, discovered in 1962, has produced 5,428 billion cubic feet (bcf) of gas so far, while Chevron’s IOC-operated gas field, discovered in 1998, has produced 5,999 bcf.
Technology, efficiency, knowledge, and investment are key factors in increasing gas production, the expert added.
Petrobangla has a plan to add an additional 300 mmcfd to the grid by 2025, but challenges remain.
“There is no alternative to relying on LNG imports in the coming years to meet the daily demand of 4,000 mmcfd,” said the expert, who chose to remain anonymous due to his role in the interim government. He further noted that new negotiations on LNG imports could bring the price down to Tk 8-9 per thousand cubic feet (mcf), while locally produced gas from IOCs costs only Tk 2.75 per mcf. With the right incentives, additional gas could be explored from IOC-operated fields, significantly reducing the cost of gas compared to imports.
Is the Interim Government on the Right Track?
The interim government has already approved the drilling of four new wells as part of an extensive exploration campaign in onshore blocks.
Petrobangla has submitted a work plan to drill 100 wells onshore between 2025 and 2029, at an estimated cost of Tk 190.5 billion. According to Petrobangla Chairman Zanendra Nath Sarkar, the new wells are expected to produce an additional 500 mmcfd of natural gas by 2029. However, ongoing depletion of existing fields will continue to put pressure on the country’s gas supply, energy experts have warned.
Offshore gas fields, and potential major discoveries there, are seen as crucial for Bangladesh’s ability to overcome the looming energy crisis.
Bangladesh plans to launch a new offshore bidding round in December 2024 to attract foreign investment in gas exploration.
Power, Energy, Rail, Road Transport, and Bridges Adviser Muhammad Fouzul Kabir Khan recently stated that the interim government is exploring all avenues, including onshore and offshore exploration, to address the energy crisis.
