No gas, pipeline abandoned, yet another project

After spending Tk1,200 crore on the gas supply pipeline, it was abandoned in 2016; now it is lying empty and silent.

The government spent the huge amount since 2007 to build a 165km pipeline for supplying gas in the Khulna-Barishal region, but they never delivered any gas under the two projects because there simply is not enough gas.

The Ministry of Power, Energy and Mineral Resources had to shut down the projects in 2016 due to the gas crisis, without even completing the installation of the distribution pipelines.

But this failed project is not stopping the state-owned Pashchimanchal Gas Company Ltd (PGCL) from taking up a new project to set up a 100km pipeline from Rajshahi to Rangpur and Saidpur at a cost of Tk258 crore to increase the supply of gas in that region.

The Gas Transmission Company Ltd (GTCL) – another government owned company that handles gas transmission to different regions – said they will be able to supply the required gas to the northern region if more LNG were imported to cover the shortage.

However, sources from the GTCL pointed out that the Pashchimanchal Gas Company Ltd cannot even supply enough gas to its customers through an existing pipeline system in Bogura, Pabna, Sirajganj and Rajshahi districts.

Thirty-five percent of the supply capacity of the PGCL is unutilised because there just is not enough gas, they added.

The optimism about covering the shortage sounds hollow because of the fact that the gas transmission pipeline in Khulna region remains completely unused despite the LNG imports. Following the project's shutdown, the distribution equipment is decaying there.

The Khulna region now depends heavily on imported oil for power generation and other industrial activities.

Responding to a query, the Energy & Mineral Resources Division's Senior Secretary Md Anisur Rahman said, "This project is one of the commitments of the prime minister and we have a plan to deliver gas downstream. As part of this plan, we have started importing LNG, and we will increase the import in the future."

According to the project proposal, the PGCL – which is responsible for supplying gas in Rajshahi and Rangpur divisions – considers Rangpur and Saidpur of Nilphamari as geographically and regionally important for the development of trade and commerce.

The company proposed installation of the pipelines at a cost of Tk258 crore to supply gas from Rajshahi to Saidpur.

The proposal, sent to the planning ministry in October this year, also mentions that an additional gas demand of 165 mmcf will be created by the time this project is completed, as 95 industries and 7 power plants will be using the gas.

There are currently 27 industries at the Uttara Export Processing Zone in Nilphamari.

The PGCL currently supplies only 176 mmcf gas per day against a demand of 272.6 mmcf in Bogra, Pabna, Sirajganj and Rajshahi districts.

Expressing hope that they will get the required gas from the Gas Transmission Company Ltd once the pipeline projects are complete, a senior official at the PGCL said, "Due to the government's energy mixed plan, gas consumption by the power plants will decrease.

"Then the required gas will be available for supply in the industrial sector."

Abdul Mannan Patwary, managing director at the Pashchimanchal Gas Company Ltd declined to comment on the issue.

Experts contradict the optimism

Experts have contradicted the optimism voiced by the gas company officials about getting the additional gas, which the PGCL plans to supply through the proposed pipelines.

Professor Dr Shamsul Alam, energy advisor to the Consumers Association of Bangladesh, said, "The PGCL has been failing to utilise its existing pipelines' capacity due to insufficient supply of gas. The upcoming project will also remain idle for the same reason.

"If the project's capacity remains unused, then the spending was unjustified" he said.

Mentioning the previous failed project costing the taxpayers Tk1,200 crore, Dr Alam said, "As there was no action against those responsible for the failure of the previous project implemented by state-owned Sundarban Gas Company Ltd, the PGCL was encouraged to take on a similar project."

'Just following the directives'

Bangladesh currently consumes around 3,170 mmcf gas per day, and 90% of that is being transmitted by the Gas Transmission Company Ltd (GTCL).

The power sector and industries have been claiming that they are falling behind in meeting production targets due to the lack of enough gas supply.

The Bangladesh Power Development Board claimed that they were not getting around 300 mmcf of its needed gas per day, causing some 27 power plants to remain partly or fully idle due to the energy shortage.

Besides, textile industries often complain about the shortage of gas and inadequate supply pressure.

When asked about the rationality of the new project under such circumstances, GTCL's Managing Director Md Atiquzzaman said, "I do not initiate such projects.

"These projects – whether they are located in Khulna or Rajshahi – were taken up following the government's decision, and we are just following directives."

Talking about the gas supply, the GTCL chief added, "Currently, we are importing 600 million cubic feet of gas (in the form of LNG) and the government is planning to import more through a land-based terminal. We will be able to supply gas to the northern region then."

However, sources at the Petrobangla – the government-owned national oil company – told The Business Standard that the land-based LNG terminal will take at least seven years to go into operation and that they were yet to appoint a consultant for the project.

The case of South-Western Gas Distribution Network

In 2007, the Energy Division took up two projects to supply gas to the five districts of the South-Western regions under the "Gas distribution network in South-Western regions" project.

Under the first project, the GTCL spent Tk850 crore to install a 165km-long transmission pipeline for supplying gas to industrial areas.

Later, the Sundarban Gas Company Ltd – a state-owned company tasked for supplying gas to Khulna and Barishal divisions – spent some Tk350 crore for purchasing gas distribution equipment, including pipelines.

The network never delivered any gas to the regions due to the scarcity of gas. The Ministry of Power, Energy and Mineral Resources finally shut down the project in 2016 without completing the distribution pipeline installation process.