Bangladesh is intensifying domestic gas exploration to counter declining production and reduce its dependence on imported liquefied natural gas (LNG), with Petrobangla targeting the drilling and workover of 150 wells by the fiscal year 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, Petrobangla Director (Operation and Mines) Engr. Md. Shoyeb discusses the causes of the current gas crisis, plans to boost domestic production, prospects for offshore exploration, gas allocation priorities, LNG infrastructure development and efforts to curb system losses.
Shoyeb says the planned drilling and workover programme will add substantial volumes of domestic gas to the national grid and help reduce LNG import costs. He also highlights growing international interest in Bangladesh’s offshore bidding round and Petrobangla’s ambition 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 addressing 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 substantial volumes of gas to the national grid. The programme will also 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 involving the Strait of Hormuz.
We tried to procure replacement cargoes quickly through tenders but encountered some difficulties. Without these disruptions, we had expected to maintain gas supplies at our targeted levels.
Md Shamim Jahangir: Petrobangla’s medium-term plan through 2034 reportedly projects a significant decline in domestic gas production. How do you plan to offset the depletion of existing reserves?
Engr. Md. Shoyeb: Yes, that is correct. It is one of the main reasons we have undertaken the programme to drill and work over 150 wells.
Alongside the additional 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 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 tender documents.
We are continuing efforts to make the bidding round successful, including promotional activities abroad to encourage international oil companies to participate in Bangladesh’s offshore exploration programme.
Md Shamim Jahangir: Bangladesh is facing 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 gas allocation system. Power 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 prioritise gas supplies to the industrial sector because it is crucial to the country’s economy.
Supplying gas to industries helps create employment and reduces our dependence on imports. That is why we want to ensure 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 rising subsidy requirements and outstanding payments affecting LNG imports and payments to international gas companies?
Engr. Md. Shoyeb: Outstanding payments certainly create difficulties in settling bills for gas supplied by international oil companies and for LNG imports.
We receive subsidies from the Ministry of Finance and use those funds to settle outstanding payments as far as possible.
Md Shamim Jahangir: As part of its long-term plan, Bangladesh has considered developing two floating storage and regasification units (FSRUs). One proposed project has become entangled in a dispute, while 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 matter while it is before the court. We will take action in accordance with the court’s directions.
Separately, we are working to establish 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 yet been finalised.
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 result from illegal connections, pipeline leaks and other factors. Our distribution companies are generally meeting the targets we have set, although there may be some 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: During my years in 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 meter tampering and theft by industrial plants are the main causes of system losses. In most cases, 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 have warned that gas shortages could force them to shut down operations, while households are also struggling to obtain adequate supplies. Bangladesh has faced gas shortages before, but the current crisis has attracted considerable attention. What is the main reason behind the situation, 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 crisis into sharper focus, including in the media.
If we can restore LNG supplies to full capacity and deliver around 2,700 million cubic feet of gas 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. Shoyeb, thank you for joining us and sharing your views with Just Energy News.
Engr. Md. Shoyeb: Thank you.