Power and Energy: Bangladesh Scan

M Tamim
PMRE Dept, BUET
mdtamim@yahoo.com

Jan 2009

Presentation Outline
Background Last Ten Years Present Status Was Petrobangla sleeping? Petrobangla Limitation What to do? POWER Way Forward

Background
Gas Discovered 1959 (chattak1) First Commercial Use 1962 (CCF) Dhaka Household Supply 1968 Major fuel switching between 1980-85 After Independence 3 rnd of PSCs First PSC production from 1998 Present production BD 50%: IOC 50%

Background
Bangladesh Gas Discoveries
Shell (P) Discovery
Titas Habiganj

8
Rashidpur Sylhet

PB discovery between 1977-2004 is 2.5 tcf at 3:1 success ratio

Mbazar Bibyiana Sangu

Kailashtila

Bakhrabad

2 P G IIP tc f

6
Chattak

Jalalabad

4 2 0

1950

1960

1963

1977 Year

1988

1990

1996

Res Rev

Last Ten Years

1998 Bibiyana 4 tcf gas discovered and stranded till 2004 dev request from PB All IOCs stopped exploration from 1999 2000 Unocal proposed gas export 2001 Bangladesh Forex reserve $ 1.3 bil
yearly IPP and gas payment $400 mil Business unable to open LC Petrobangla behind IOC payment by 6-7 months

2002 9-member Gas Util Committee formed

Last Ten Years

2002 Gas Util Comm Report
At least 5 year lead time required between activity and discovery Limited export from new discovery is suggested as a market signal to initiate immediate exploration work (PB forex burden would reduce) As first right of refusal in the contract, Bangladesh can always buy the gas (avoiding any export option) Irrespective to the reserve potential (floating on gas!) if new gas is not found, unmet demand will kick-in as early as 2010 If proper measures are not taken the export and import will not be far apart Encourage increase of gas use

Last Ten Years

No market signal of any kind was given to encourage vigorous exploration IOCs relinquish all areas of risky investment and just maintains minimum work program to hold onto the good prospects Only Bangura (.44 tcf) is discovered by Tullow within old seismic data area (Leanest decade in BD exploration history) In absence of IOC activities, BAPEX was also kept idle from exploration work To use up Bibiyana reserve, gas use was encouraged in all sectors (the only recommendation implemented by the governments)

Present Status
Total Production 1800 MMcfd
Petrobangla IOCs 900 MMcfd 900 MMcfd

Demand Unmet demand

2000 MMcfd 200 MMcfd

Due to transmission limitation 100 MMcfd Due to production limitation 100 MMcfd

Cairn 3%

Production

BGFCL 40%

Chevron 41% BAPEX 2%

TGTDCL 20%
SGFL 10%

GTCL 70%

Supply Chain
1778 MMCFD
JGTDSL 6%
Power 42%

CNG Dom Tea 5% 10% 0.2% Com 1% Ind 13% Cap 11% Fert 15%

Loss 3%

PGCL 4%

BGSL 16%

TGTDCL 74%

Consumption

Transmission Distribution

Niko 0.29%

Tullow 4%

JGTDSL 4% BGSL 6%

PGCL 0%

How did we arrive here?

Annual Gas Demand at Different Growth Rates
1.4

Year 2000 consumption = 0.33 Tcf

1.2

1.28

1.0

For the first time demand has outgrown all forecast!

1.06 0.88

Tcf

0.8

7%

0.72 0.60

0.6

0.4

3%
15 17 09 14 08 05 03 06 11 16 19 20 10 02 04 07 12 13 18 20 20

0.2

01

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

Growth of CNG Filling Stations

250

Captive Power Growth was 229 equally phenomenal

CNG Stations

Location

CNG Station 99 16 27 9 3 3 2 2 29 12 5 1 1 13 6 1 229

Conversio n Workshop 58 4 6 6

Dhaka Savar Gazipur Nganj Kishorganj Narsingdi Tangail Manikganj Chittagong Comilla

200

Cummulative Nos.
123

165

150

NOS.

100 59

1 17 6 2

100

50

Oil price rising

41 23 42 64
2007-08 (April '08)

Feni Bbaria Lakhmipur Sylhet Bogra Pabna Total

7 7
0

9 2

12 3

18 6
YEAR

8 8 116

41

1983-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Was Petrobangla Sleeping?

GAS PRODUCTION-PETROBANGLA & IOCs : FY 2002-03 to 2007-08(Jan,08)

18000

Gas in MMSCM

16000 14000 12000 10000 8000 6000 4000 2000 0

2003
9449

2004
9715

2005
10086

2006
10117

2007
10149

2008
5410

PB

Cairn

1466

1480

1341

1573

1128

417

Chevron

1011

1626

2158

2930

3954

3353

Tullow

76

565

402

NIKO

198

225

124

33

TOTAL

11926

12821

13783

14921

15920

9615

Production Increase Between 2007 and 2008

AVERAGE DAILY GAS PRODUCTION (MMCFD)
Month

2007 1407 1496 1574 1644 1646 1644

2008 1671 1572 1686 1757 1754 1770

Jan Feb Mar Apr May Jun

Avge increase of 120 MMcfd was mostly used by non-bulk

GAS SALES STATEMENT :FY 2002-2008(UPTO JAN,08)

16000 14000 12000 10000
Gas in MMCM

8000 6000 4000 2000 0

Power Fertilizer Captive Industry Comm Brick Tea CNG Dom Total % of increase

2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

5274
5647
5975
6354
6262
3711

2716
2628
2661
2523
2647
1313

741
904
1070
1384
1770
1248

1182
1313
1456
1791
2194
1445

128
136
138
147
160
106

15
5
0
0
0
0

21
23
23
21
21
17

0
55
103
194
335
328

1269
1395
1491
1607
1791
1117

11347
12106
12917
14020
15185
9286

9.90%
6.69%
6.70%
8.61%
8.30%
4.83%

System Loss
900 800 70 0 600

7.0% 6.0%

776

5.0%

678

400

692

655

50 0

4.0% 3.0% 2.0%

Gas in MMSCM

300 200 10 0 0

537

177

1.0% 0.0%

20 04 /0 5

20 02 /0 3

20 03 /0 4

20 05 /0 6

20 06 /0 7

Outstanding bill of Tk 270 crore recovered since Jan 2007

20 07 /0 8

(U

pt o

ov )

Petrobangla Limitation

Petrobangla Limitation
Total IOC E&P Investment $1.5 Bill (since 1992)
Resulting 900 MMcfd production

Total PB E&P Investment $0.05 Bill (since 1990)

Resulting 15 (30) MMcfd production

Lack of funding and latitude under the present mode of operation do not allow PB to react and rectify market imbalance like a true energy company on an emergency basis If the commercial framework of gas business is not corrected, Petrobangla will never be able to supply gas reliably

PSC Gas (December 2007)

Cap Invst Cost Recvy yr Mill US$ Sangu 1998 Jalbad 1999 Mbazar 2005 Bibiyana 2007 Bangura 2008 660 217 100 405 161 Ongoing Mar 03
Recovered

Reserve (Rec) tcf 1.03 (0.84) 1.19 (0.84) 0.45 (0.36) 3.1 (2.4) 0.44 (0.3)

Cum gas share IOC:BD 80:20 30:70 49:50 71:29 66:34

Gas Price Tk/Mcf 162 57 91 136 106

Mar 10 Sep 10

Petrobangla Reality
OLD GAS vs. NEW GAS
90% of present PB gas was bought from Shell at US$ 10 million(!) in 1975 Old Gas less than $ 0.10/Mcf (!) Cost of finding new gas from Green Fields
BAPEX Tk. 65/Mcf (wellhead) IOCs Tk. 70 110/ Mcf (wellhead)
Adding Proc, Trmn, Distbn (Cost+ price is Tk 140/Mcf)

PB Weighted Ave price Tk. 93/Mcf Minimum cost of import Tk. 500/Mcf !

Chronology of World and Bangladesh Gas Price

Year
1974 1980 1985 1990 1994 2000 2003 2007

Gas Price (Power) Tk/Mcf

3.7 7.7 15.6 37.9 47.5 62.9 70 73.91

Gas Price (Fertilizr) Tk/Mcf

3.72 7.75 15.6 32.8 41.3 54.6 60 63.4

Gas Price (Power) $/Mcf

0.46 0.47 0.50 1.06 1.18 1.18 1.20 1.07

Gas Price (power) change %

Excha nge rate Taka/$

08.08

Oil price $/bbl

Eqv gas price, $/Mcf

1.3 4.4 3.4 2.5 1.8 3.2 3.3 8.0

Saving %

10.41 35.69 27.53 20.45 14.74 26.20 26.78 65.00

170 830 580 135 50 170 175 650

+2.1 +6.3 +112.0 +11.3 0.0 +1.7 - 10.8

16.25 31.00 35.80 40.25 52.14 58.15 69.00

What to Do?

Gas Reserve Vs Production

(As of December 2007)
25 21.265 20

Gas in TCF

15.4035

15 10

7.6918 5.4711

7.98

7.42

>90%

<40%

5 0

Possible Probable Recoverable Recoverable

40-80%

Proven Remaining

Production

Proven Recoverable

Proven

Current Reserve Categories Supply Demand Balance

6000 5000
G as mmcfd

Shortfall would commence in 2011 against Proved Reserves

4000 3000 2000 1000 0

21 13 07 09 15 17 23 20 05 11 19 20 20 20 20 20 20 20 20 20 20 25

Ref: GSMP 2006

Proved

Probable

Possible

Case B Demand

50 45 40 35 30 25 20 15 10 5 0

Bangladesh Floating on Gas!

Resources Reserves

Gas in Tcf

32 tcf Potential (50%)

Used up to 2007 7.4 Tcf 0.6 Tcf/year

13.4 tcf Remaing

PAST

PRESENT

FUTURE

Expected Augmentation (short term)

Based on Proven reserve and new drilling

2008-09 165 MMscfd (85 Wkover + 80 Cap addn)

2009-10 115 MMsfd

2010-11 175 MMscfd

Production Augmentation Activities (Long term)

Company CairnChevron Total EP & JV Cairn Programs Exploration in Block # 5,7,10 Period Nov 08 June 12 Nov 08 June 12 Nov 08 June 12 20092016 Productio n MMSCFD 200

Exploration in Block # 17 & 18 (3-D Seismic followed by exploration drilling) Exploration Drilling of Magnama & Hatiya Structure

50 - 100

100

Bangladesh Offshore Bidding Round 2008

300 - 500

Transmission Projects under Implementation

Projects North-South System Expansion Muchai Compressor Station Ashuganj Compressor Station BB Corridor Expansion Monohordi-JMB East Loopline Expansion to West Zone Elenga Compressor Hatikamrul-Ishwardi-Bheramara Pipeline Bonpara-Rajshahi Pipeline Bheramara-Khulna Pipeline Pipeline from Titas field to A-B pipeline Bakhrabad Siddirganj Ashuganj-BKB-CTG Trans. Pipeline (under active consideration of ADB) June 2011 June 2010 June 2009 June 2011 June 2010 June 2010 Dec 2011 ADB ADB ADB ADB ADB/GOB WB ADB 10000 hp 30x87km 12x51km 20x165k m 24x14km 30x60km 30x235k m June 2009 ADB 30x51km Dec 2011 Dec 2011 ADB ADB 12000 hp 18000 hp Completion Time Funded By Size

CT Gov Measures
3D Seismic of 5 major PB gas fields to be completed by 2011 may add 5 tcf of probable reserve to the system With gas price increase, at least 1 tcf of thin bed reserve within PB fields will be commercially viable BAPEX was granted $0.5 billion to be self supporting in seven years (highest in Bangladesh history) Launched 3rd round offshore bidding Actively pursued to vacate the onshore exploration moratorium imposed by the high court Tried to resolve all disputes with the IOCs Tried to formulate coal policy

Power
The key to power is available and diverse primary energy Generally, funding and management can resolve power problem

POWER INDICATORS
INDICATORS ACCESS TO ELECTRICITY
PER CAPITA CONSUMPTION BD:IND:PAK:SL

STATUS 40% 137 kWh 1 : 5 : 3.5 :2.5 4500 MW 3600-3800 MW 700-900 MW

SUMMER PEAK DEMAND PEAK GENERATION POWER SHORTAGE

PRESENT POWER SITUATION

GENERATION CAPACITY
TYPE INSTALLED CAPACITY MW 3778 1454 5232 DE-RATED CAPACITY MW 3308 1454 4762 AVAILABLE CAPACITY (AS ON 08 APR 08) MW 2260 1352 3612

PUBLIC IPP TOTAL

Maximum generation in history - 4130 MW

Fuel Mix of Power generation

Facts
2000 power sector master plan forecasted 5000 MW peak demand for 2007 Only 80 MW power was added during 2001-2006 period Presently 400-500 MW stranded capacity due to gas supply limitation 300-400 MW F/S and maintenance 150-180 MW short in Kaptai due to water shortage Why gas shortage now?

It was always there. It has been exposed now due to power plant availability by last years maintenance and management effort Rapid decline of Sangu field Better performing fertilizer sector Unusual growth in CNG and captive power gas demand in a very short span (2006-07)

Better but Not Good Enough

(generation)
2007 (MW) 2008 (MW) Diff (MW) February March April May June 2693 3113 3376 3331 3256 3503 3773 3617 3412 3376 810 660 240 81 120

Measures by the CT Gov

Through maintenance and Rehab, added 600 MW in 2007-08 Capacity addition in 2007-09
Plants commissioned New Contracts signed Contracts in process 422 MW 1100 MW 1400 MW

(Based on time bound (2008-2011) gas guarantee with some uncertainty)

NO MORE gas based power plants from existing reserve Demand management
Efficiency promoting CFL Conservation Low usage Time shifting Holiday staggering, Shopping hour Lifestyle motivation Media campaign

System Loss (w/o transmission)

Distn Cos. PDB REB DESCO DESA WZPDCo 2006-07 % 16.58 12.39 13.44 20.53 14.53 2007-08 % 14.72 14.07 10.62 19.03 13.4 Up to Apr 08 % 14.54 14.3 10.92 18.58 13.08

Revenue increased by 1300 crore in 2007 over 2006

(Average system loss reduction of 2%)

Other Measures by CTG

Open merchant power generation for private purchase (own fuel and market) Opening state gridlines for private use based on open access rule Public-private partnership for all infrastructure (mainly generation) Coal based power (coal policy to be approved) Renewable energy policy Conservation act (in progress) Gas act (waiting final cabinet approval) Nuclear power

Way Forward

Power Sector Master Plan

Target 100,000 GWH by 2025

Current : ~22000 GWH

Base plan for growth from 22,000 GWH to 100,000 GWH by 2025 calls for an additional 17,700 megawatt (MW) of generating capacity to be installed by 2025. Will require significant investments, likely billions of dollars.

Go Coal for Power Generation!

Reserves in Bangladesh
No. 1. 2. 3. 4. 5. Place/Field (Discovery) Barapukuria, Dinajpur(1985) Khalaspir, Rangpur(1995) Phulbari, Dinajpur(1997) Jamalganj, Jaipur(1965) Dighirpar, Dinajpur(1995) Total Depth (Meter) 119-506 257-483 150-240 900-1000 327 Area (Sq. Km) 6.68 12.00 30.00 16.00 Yet to be Known Proven Reserve (Million Ton) 390 143(GSB), 685(Hosaf) 572 1,050 200 (partly evaluated) 2,897

A Probable Coal Consumption Scenario

1000 million tons (1 billion ton)

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1000 MW 1000 MW 1000 MW 1000 MW 1000 MW 1000 MW 1000 MW 1500 MW 1500 MW 1500 MW 1500 MW 1500 MW 1500 MW 2000 MW 2000 MW 2000 MW 3000 MW 4000 MW 5000 MW 6000 MW 7000 MW 8500 MW 10000 MW 11500 MW 13000 MW 14500 MW 16000 MW 18000 MW 20000 MW 3mt 6mt 9mt 12 m t 15 m t 18 m t 21 m t 25 m t 30 m t 35 m t 39 m t 43 m t 48 m t 54 m t 60 m t 418 mill tons

COAL Electricity Generation

A COAL USE SCENARIO FOR BANGLADESH
70 60

50

MILLION TONS

40

30

20

10

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 YEAR

Twenty Year Energy Security

Find new gas, enhance existing production Release maximum gas from power production using coal fired generation Prioritize gas use for industry, CNG and fertilizer Promote LPG for cooking Promote renewables, especially bio-gas and solar for rural areas Immediate adjustment of all energy prices based on ANY rational formula Reform of organizational and commercial framework of energy business

Bottom Line!

Energy Security doesnt come in a separate package! So If we cant manage our economy, affordability cannot dictate reliable availability