GAS shortages are going to take a serious turn by next year as per a news report on Saturday which quoted Petrobangla chairman as saying that unless fresh gas reserves are found and taken to the national grid, new gas based power plants will not be able to come into being. He said 34 new power plants which are under construction in the public and private sectors and scheduled to come into operation by 2016 will be the victims of gas shortage. Moreover, their commissioning with imported diesel and furnace oil may increase their production cost significantly. He said at least nine of those projects were approved by the government later last year ignoring Petrobangla objections and others were approved over two years back.
The country is already facing acute gas shortages for the past couple of years and it is only exponentially increasing with a steady rise in demand for gas from households, commercial and industrial use. The demand-supply gap is now over 500 mmcf daily at a production level of 2300 mmcf daily. Drilling of new gas fields is facing delays due to many reasons and the crisis is further aggravated by the lack of new discoveries in the recent past. We know that drilling gas wells is a time consuming process at a time when some existing gas fields have either decreased production or are going to be abandoned due to the depletion of reserves. The government is desperately trying to lease out gas blocks in the Bay of Bengal but response from International Oil Companies (IOCs) is quite limited. On shore exploration by Gazprom of Russian is also going slow.
So there is hardly any chance of a sudden boost to production. The new power plants with a total capacity of 5,372 megawatt would require about 1,100 mmcf of gas which is totally impossible in the present scenario after the meeting existing demand for fertilizer production and the existing power plants.
So there is a growing apprehension that the government may face payment of a huge penalty to sponsors of several gas-based new power plants if it fails to provide them with the promised gas. The Power Development Board has awarded these contracts to those power plants mainly owned by powerful lobbies and business firms close to the government. PDB has already expressed concern over the supply of 286 mmcf to generate 1608 MW electricity by some new plants which received contracts during the past two years.
We know that the government is planning to import liquefied natural gas (LNG) from Qatar but it may also take time as the construction of the LNG terminal in the off-shore waters of Bay of Bengal is yet to begin. Moreover using imported LNG will be similarly expensive and may trigger a fresh crisis in the power sector by way of higher generation costs.
We suggest the government to expedite domestic gas exploration drive and go for other energy saving system including power generation to coal based plants. We hold the view that augmentation of local coal production and transforming some of the plants to coal based operation may bring some relief to avert the crisis.
