UNB, Dhaka :
The government will initiate a move to evolve a “gas utilization strategy” to ensure the fossil fuel’s appropriate use in different sectors according to each sector’s priorities.
In this regard, the gas price will be reviewed and readjusted for different sectors considering their optimal priority, State Minister for Power and Energy Nasrul Hamid told UNB.
Official sources said, the new move comes against the backdrop of the government’s plan for import of LNG to meet the growing energy demand.
After more than 3 years of bureaucratic tangle, finally the government inked an initial deal on June 26 to set up a floating LNG terminal 5-10 km offshore from Maheshkhali island in Cox’s Bazar.
As per contract, the construction of the floating storage & re-gasification unit (FSRU)-based LNG terminal is scheduled to be completed before June 2016, which will supply 500 million cubic feet per day (mmcfd) gas to the national gas network.
For this supply, the government few years ago signed another memorandum of understanding (MoU) with Qatar to import the required LNG. But the price was not fixed for the import of the liquified natural gas. The price will be fixed with the start of its import.
Experts believe, the LNG’s imported price will be above $10 per unit (thousand cubic feet or MCF) while the local gas production cost is between
$2-$3.5 per unit. At present, per mmbtu (British Thermal Unit) price of LNG is between $16-17 on the international market.
“The costly import of LNG will obviously influence the overall gas price and finally an upward adjustment will be required to re-fix the gas price for making the import of gas viable and cost effective”, said former Petrobangla chairman Muktadir Ali.
He said, it will be difficult to keep the LNG import continue if the imported gas is sold in the local market at a subsidized price.
Prime Minister’s Energy Advisor Dr. Tawfiq Elahi Chowdhury also believed that the gas price will be re-fixed in the perspective of the global market price at the time when imports start.
About the idea of gas utilization priority, State Minister for Power and Energy Nasrul Hamid said the government doesn’t want anymore to allow gas supply to those sectors which are not cost effective, particularly to remote districts with low density of industrial customers.
“We have to stop the practice of transmitting the costly natural gas to those areas where it’s not cost effective. And we have to set the priorities right as to which sectors should get gas and which should not, and also the price for that sector,” he told UNB.
He said, it is obvious gas price will go up for import of LNG. That’s why we have to set the nation’s priority of gas for different sectors and re-fix the gas price.
At present, a proposal from Petrobangla on preparing a national gas utilization guideline remained pending with the Energy Ministry, which said fertiliser should get the highest priority followed by power in second place; industries and tea gardens as third; captive power as fourth, residential and commercial as fifth; and CNG sector as the sixth and last in getting natural gas.
The proposal, placed in mid-2013, however, did not say anything regarding any sector’s upward or downward adjustment. Energy Ministry is also yet to give its final approval to the guideline.
Petrobangla chairman Dr. Hussain Monsur said it is absolutely the government’s jurisdiction to review and reset the gas use priority and price.
