Staff Reporter :The state-owned Petrobangla has taken new initiatives for increasing gas supply to both domestic and industrial consumers as the country is reeling a shortage of about 500mmcf gas daily. At present daily average gas supply is around 2,700 million cubic feet per day (mmcfd) against the demand of over 3,200 mmcfd, Petrobangla sources said.To meet the deficit, Petrobangla has taken new initiatives which include two- dimensional (2D) seismic survey in two Shallow-Water (SW) blocks in the Bay of Bengal.Meanwhile, India’s ONGC Videsh Ltd (OVL) has completed 2D seismic survey and the government has been analysing its data. The 2D survey data analysing would be completed by June with a view to drilling well for gas and oil from October.”The OVL has planned to complete analysing data of the 2D survey by June before starting drilling in the blocks SS-04 and SS-09,” Petrobangla director for production sharing contract (PSC) Md Quamruzzaman told journalists.To overcome the energy crisis and ensure that industrial output is not hampered due to gas supply shortage, the country has been working to import liquefied natural gas (LNG).The state-run Petrobangla on March 31 inked the initial agreement on terminal use with Excelerate Energy Bangladesh Ltd to build the country’s first LNG terminal, a floating storage and re-gasification unit (FSRU), at Moheshkhali Island in the Bay of Bengal. Any fresh discovery of hydrocarbon will boost the country’s growing economy significantly, said senior Petrobangla officials.The officials said ONGC inked production sharing contract (PSC) with Petrobangla and the government in February, 2014 for oil and gas exploration in the two offshore blocks.The state-run Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) has 10 per cent carried over interest in both the blocks. The ONGC committed to spend US$58.4 million for block SS-04 to carry out 2,700 line km 2D seismic survey, 200 sq-km 3D surveys and drill two wells during the contract period.For block SS-09, ONGC committed to spend $86.4 million and conduct at least 2,850 line km 2D seismic surveys, 300 sq-km 3D surveys and drill three wells. The contract period for exploration is eight years with a five-year initial exploration period and a three-year subsequent exploration period.The contractors will be allowed to operate and sell oil and gas for 20 years from an oil-field and 25 years from a gas-field.Wellhead gas prices in Bangladesh are pegged to high sulphur fuel oil (HSFO) prices in the international market, while oil prices are determined on a ‘fair market value’ basis as agreed by both contractors and Petrobangla.The floor price for HSFO has been fixed at $100 per tonne and the ceiling price at $200 per tonne to fix gas price.The latter works out to around $5.50 per Mcf (1,000 cubic feet) before a 37.5 per cent corporate tax that has to be paid by the contractor.Other features of the PSC are the licence-holder will have right to full repatriation of profits; will not be charged any signature bonus or royalty; will not need to pay duty for equipment and machinery imported for operations during the exploration, development and production phases; will have 100 per cent cost recovery; and production bonuses, the officials said.The contractor can also sell gas independently to third parties instead of going through state-run Petrobangla.
