According to the World Population Review, Bangladesh ranks number eight among the most populous nations on earth, with an estimated population of 173 million within an area of 130,170 square kilometres.
A country with such a growing population and huge infrastructural developments requires a continuous energy supply to meet the demands of its rising appetite for energy and power. Although energy is a prerequisite for its socio-economic development, the country suffers from an energy supply shortage.
Bangladesh currently generates electricity from indigenous natural gas, coal (domestic and imported), imported oil, imported LNG, Biomass, hydropower and solar power. The installed capacity from 2018-2022, according to the BGDCL 2022 report, shows an overall trend of increase in natural gas, furnace oil and coal-fired power plants.
According to the Institute for Energy Economics and Financial Analysis data, the increase in solar power and hydropower sectors in Bangladesh has been very slow from 2009 to January 2023, and only added 259 MW in 14 years.
Alarmingly, the use of coal for power generation has also increased despite its environmental impacts. IEEFA's report on electricity sector transition estimated that 49% of the country's electricity is generated from natural gas. Furnace oil and coal have a 32% and 11% share in electricity production in Bangladesh.
In a developing country like Bangladesh, with humongous population pressure, the need for hydrocarbons is unlikely to recede by 2050.
According to Bangladesh Oil, Gas and Minerals Corporation (Petrobangla), Bangladesh has 29 gas fields, with the recently discovered Ilisha gas field in Bhola. Among the proved and probable (recoverable) gas reserves of around 29.54 TCF, 20 TCF gas has already been produced, and only 16%, which accounts for only 9.54 TCF, remains for future use.
The country has already started to experience a decline in natural gas production in most of the gas fields. The total natural gas production in 2019 was 1010 BCF, whereas the total consumption was 1110 BCF. At this rate, by 2030, the shortfall in production against demand will be around 3800 MMCFD approximately.
If it continues to decline like this and no discovery of gas reserves or sands is made, then the domestic reserve of natural gas will likely be exhausted by 2030-2031. The substantial shortfall of domestic natural gas leads to the question of finding viable alternatives.
Amid the severe natural gas (NG) crisis, the only possible, if not feasible, option was to import LNG from the global market. In case of no new onshore and/or offshore discoveries, Bangladesh will have to import over 100,000 metric tons of LNG yearly, which can aid in meeting the country's growing demand, as calculated by Petrobangla.
According to the International Gas Market report, in 2021, the highest percentage of LNG trade expansion in emerging Asia concerning global expansion showed that Bangladesh accounted for the highest percentage (31%) of LNG imports among Asian countries, leaving behind countries like China (17%), Thailand (16%), Pakistan (16%), Korea (14%) and India (11%).
The problems with the global LNG market are multifold, as the global market is extremely volatile and can be impacted by various issues, including supply outages in case of global pandemics, increasing demand from other countries that are phasing out of coal and moving towards greener energy resources, significant disruption to gas prices worldwide due to the Russia-Ukraine war and unpredictable price hike of LNG in the global market over the years.
Therefore, in the long run, introducing humongous amounts of imported LNG will cost a fortune for a developing country like Bangladesh. It will be difficult for the country to ensure sustainable economic growth with the amount of money spent on LNG imports.
What are the alternatives?
On the flip side, Bangladesh has been exploring hydrocarbons for not very long. Looking back at the history of gas exploration in independent Bangladesh, the country still has not reached an advanced state in exploration.
Being one of the largest deltas around the globe, Bangladesh has the potential to be a region rich in natural gas resources. For more than a decade, the exploration for new gas reserves has been very slow, almost insignificant. In contrast, the geological analyses of the region suggest that there are substantial pieces of evidence of potential gas discoveries.
So, what can be done?
The existing gas fields should be explored more for new undiscovered reservoir sand zones. State-owned production companies like BGFCL, SGFL and BAPEX should also start re-appraising their existing fields to discover new natural gas sands.
BAPEX is now fully equipped with a 3D seismic crew as the only national exploration company. All the existing gas fields should be thoroughly surveyed to identify potential gas zones.
From the India-Myanmar border towards the west to the centre of the subsurface, Bangladesh is characterised by anticlines that are elongated and can act as structural traps. These structural traps contain most of the country's proven natural gas reserves.
In addition, so far, the surveys are mostly done in areas of the Surma basin, where the traps are primarily structurally constructed. The structural traps of Chittagong-Tripura folded belts have still not been appropriately surveyed. Surma basin may likewise still have similar structural traps yet to be delineated.
The gentle anticlines towards the west contain channel-cut sediments that are excellent examples of stratigraphic traps. Moreover, although the western part of the country lacks the potential for structural traps, it has more significant potential for stratigraphic traps and unconventional hydrocarbon systems and needs to be explored thoroughly.
In many parts of the Bay of Bengal, for instance, in India, Myanmar, Malaysia and Vietnam, offshore hydrocarbon exploration is in full swing, compared to Bangladesh. The Bay of Bengal offshore region is a textbook example of broad anticlinal structures with structural and stratigraphic traps.
The huge thickness of reservoir-quality sandstone and organic-rich shale at greater depths indicate that this region is highly prospective for exploring natural gas. Looking at the success rates of neighbouring basins, it can be stated that the offshore region of Bangladesh is harshly overlooked in terms of exploration and mapping.
In continental margins and deep marine sediments, gas hydrates are crystalline solids of hydrogen-bonded water crystals with gas molecules trapped inside. On both sides of the Bangladesh Exclusive Economic Zone (EEZ), gas hydrate accumulations have been discovered in the Indian and Myanmar offshore regions.
The seismic profiles indicate the presence of seismic traces of gas hydrates located near the slope at about 1300-1900 metre depth. However, further studies are required to precisely delineate the structural condition for migration pathways and reservoir characterisation.
Bangladesh's annual natural gas consumption is approximately one TCF. A depleting total reserve of 9.54 TCF can only support the energy sector for a maximum of 9-10 years. The total shortfall of natural gas would be 25 BCF by 2030, equivalent to 25000000 MMBtu of LNG.
Considering the latest total cost per cubic meter of LNG import, calculated using $50 per cubic metre, the total cost for importing LNG till 2030, to account for the shortfall, would be $594.3 billion. This includes purchase cost, import cost and economic cost.
On the other hand, the minimum exploration and appraisal to expedite the current situation and to fill up the shortfall by 2030, drilling 45 wells onshore and offshore, would cost approximately $41.69 billion.
From the above cost calculations, the cost of LNG import will be 14 times higher than exploring for and producing from domestic hydrocarbon resources and reserves. Hence, the government of Bangladesh should expedite domestic gas exploration activities to minimise the cost of LNG import from a highly volatile global market. This will strengthen the national economy and result in skilled manpower in the energy sector.
Haniyum Maria Khan is a Senior Lecturer at the Department of Environmental Science and Management, North South University, Bangladesh. Mohammad Moshiur Rahman is an Asscoiate Professor at the Department of Environmental Science and Management, North South University Bangladesh. Nadim Khandaker is a Professor at the Department of Civil and Environmental Engineering, North South University, Bangladesh.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.