Gas prices to be dynamically adjusted to costs
"We want to dig 46 gas wells by 2025 to ensure gas supply," the state minister said while speaking to journalists at the secretariat on Tuesday (16 January)
The Energy Division plans a dynamic price adjustment for the gas used in households and industries through pipelines, aligning it with the costs of production and imports.
Following the initiation of monthly international market-based fuel oil price adjustments in March, the same formula will be introduced for gas.
"From next March-April, there will be a dynamic adjustment of fuel oil prices every month, like neighbouring countries. While neighbouring countries adjust prices daily, we will adjust once a month at the beginning," said State Minister for Power, Energy, and Mineral Resources Nasrul Hamid during a press briefing at the Secretariat on Tuesday.
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"No initiatives have been taken to increase household gas prices. We aim for a dynamic adjustment of the price, but we are working to keep it at a tolerable level. No decision has been made yet," he added.
The government has committed to fully phasing out subsidies for the gas and power sectors by 2026, a condition tied to borrowing $4.7 billion from the International Monetary Fund last year to address the dollar crisis.
"While neighbouring countries adjust prices daily, we will adjust once a month at the beginning."
As part of this commitment, the Energy Division is taking the initiative to align the retail prices of fuel oil and gas with both the import and production costs.
At present, the price of cylinder gas – namely Liquefied Petroleum Gas (LPG) – is determined by the Bangladesh Energy Regulatory Commission at the beginning of every month in coordination with the international market price. However, the regulatory agency determines the price of gas supplied through pipelines from time to time.
Sharing the plan for uninterrupted gas supply from domestic sources without increasing the import of Liquefied Natural Gas (LNG), the state minister said the country's gas demand in 2027 will be 6,000 mmcfd – million cubic feet per day.
Nasrul Hamid mentioned the possibility of obtaining 1.6 TCF (trillion cubic feet) of gas from the outer tank at Bibiyana Gas Field in Habiganj, saying, "Chevron is working on it, and confirmation is expected by the end of this year."
"We are very optimistic about Sylhet-10 and Bibiyana. We are finding fresh gas stocks once again. Our current plan is to extract our own gas. After completing the drilling of 46 wells by 2025, we have further plans to drill another 100 wells. We are hopeful that by 2024-25, we will be able to supply an additional 500 mmcfd of gas from our own country," he said.
He said the government has planned to bring in two more Floating Storage Regasification Units (FSRUs) that will be connected to the national grid in 2026 and 2027.
"Now, we import 20% of our gas. We do not want to significantly increase the import volume. The gas discovered in new areas, including Bhola, is crucial. If gas is found in the deep sea, then we will be in a favourable position. Our intention is to import gas only to meet the gap between demand and supply," said Nasrul Hamid.
He said supplying gas according to demand is the biggest challenge, and there has been a shortage of gas for several days. However, he emphasised that this inconvenience is temporary and is often worsened by chilling weather, leading to decreased gas pressure.
An FSRU has returned after undergoing maintenance and will resume operations in a day or two. The other FSRU will go into the dock on 18 December and is expected to return in the first week of March, he added.
He said a plan has been initiated to ensure an uninterrupted supply of gas starting in March, with a focus on Ramadan. A volume of 400 mmcfd of gas will be integrated into the existing system.
"We will prioritise the energy sector the most. We have successfully found gas in almost all the wells we drilled. The Bhola-Barishal pipeline is set to become operational this year, and we have already commenced transporting CNG gas from Bhola. This supply is expected to further increase in March."
Nasrul Hamid emphasised that the highest priority for the Bangladesh Petroleum Corporation (BPC) is to complete the construction of the Dhaka-Chattogram pipeline and transport jet fuel to the third terminal in the pipeline.
Additionally, he stressed the need for the rapid implementation of the Single Point Mooring (SPM) system, as the quicker it can be executed, the sooner it will become cost-effective.
Highlighting that the daily electricity demand during Ramadan and the irrigation season may exceed 17,500 MW, the state minister said the timely supply of coal, gas, and fuel oil to power plants will make it possible to meet the power demand.
He expressed concerns about the potential disruption of energy security if the ongoing Hamas-Israel war spreads further.
"The increasing tension in the Middle East is a cause for concern. If a conflict breaks out in the region, the outcome is unpredictable. The price of oil per barrel has already increased, making it challenging to maintain oil prices at a tolerable level," he added.
Stating that deep-sea oil and gas exploration work will commence within this year, the state minister mentioned that, subject to the prime minister's approval, a decision will be made to extract coal internally without causing harm to the environment or agricultural land.
Emphasising the target of providing 40% clean energy of the total demand by 2041, he said, "We are working on setting up 12,000MW solar power. Contracts for 2,200MW of solar power have already been awarded, and next month, there will be an agreement with Nepal to bring in 40MW of hydropower."
