Anisul Islam Noor :
The energy regulator is finally going to designate the state-run Petrobangla as custodian of the new ‘energy security fund (ESF)’ in a reversal of its order over the fund-management modalities.
A senior official of the Bangladesh Energy Regulatory Commission (BERC) said that the regulator decided to change the initial management modalities of the ESF following a protest from the petroleum corporation.
The BERC had recently ordered the creation of the fund, assigning the state run gas marketing and distribution companies as the custodians.
“The commission also instructed the marketing companies to deposit money with the ESF along with interest regularly through a separate bank account,” said the official.
Petrobangla subsequently differed with the BERC order and wrote to the commission about its interest to hold the purse strings of the fund instead of the companies.
The petroleum corporation should be custodian of the ESF as it purchases natural gas from both local and foreign companies and sell to consumer-ends through the gas marketing companies; Petrobangla Chairman Istiaque Ahmad clarified in his letter. Officials said the commission ordered creation of the ESF to help finance energy projects ensure that gas-guzzling industries don’t face abrupt closure for energy shortfall.
The fund should be raised through setting aside Tk 1.01 per cubic metre against the asset value of natural gas as fixed at Tk 25 per cubic metre, the BERC order spelled out.
Some Tk 28 billion could be accumulated into this fund every year, once it takes effect, they said.
This will be a second fund to be created by the commission from sales of natural gas. BERC in August 2009 ordered the formation of ‘gas development fund (GDF)’ which is currently in use for oil and gas exploration activities across the country.
Petrobangla was made custodian of the GDF.
The commission had ordered creation of the fund when it hiked natural gas tariffs by 11.22 per cent in 2009 on condition that additional revenue generated following the hike be transferred into the fund.
Under new ESF, expensive energy projects like import of liquefied natural gas (LNG) could be financed with the funds.
The government might also arrange subsidy for the use of LNG and liquefied petroleum gas (LPG) from the fund.
Officials said, the country has set a target to start importing LNG from 2017. Currently, the government is working to build a couple of terminals to facilitate LNG import.
Power Cell, a state-owned entity under the Ministry of Power, Energy and Mineral Resources (MPEMR), has already short-listed four firms for awarding contract to build a land based LNG terminal at Matarbari on Moheshkhali Island in the Bay of Bengal.
The Cell sought to build the onshore LNG-import terminal in the south with a handling capacity of 3.5 million tonnes per year, on build- own-operate (BOO) basis.
Separately, Petrobangla is on final negotiations with US based Excelerate Energy Ltd Partnership for building the country’s first floating LNG terminal on the Moheshkhali Island.
Gas from the planned terminal is expected to be supplied to gas-guzzling industries, including power plants and factories.
The floating LNG terminal would have a capacity of 5.0 million tonnes per year and a re-gasification capacity of at least 500 million cubic feet per day (mmcfd).
