Energy & Power

Snapshots

ANH Akhtar Seeks Early Retirement

Former Power Secretary ANH Akhtar Hossain sought early retirement from work after he was sent back to Bangladesh Water Development Board (BWDB). Akhtar filed an application with BWDB, where he was posted back as Additional Chief Engineer, a post equivalent to a Deputy Secretary. Water Resources Secretary Syed Muhammad Zobayer said that Akhtar applied for voluntary retirement. But he did not disclose whether or not the application was accepted.

Govt Seeks $191m to Raise ERL’s Capacity

The government is negotiating with the Islamic Development Bank for a $191-million loan to use it for increasing the production capacity of the Easter Refinery Limited (ERL). The state-owned complex now refines about 14 lakh tons of crude oil a year.

According to Energy Division sources, the IDB has already agreed in principle to provide the loan to carry out the balancing, modernization, rehabilitation and expansion of the refinery. A final negotiation meeting is expected to be held next month.

They said an IDB team was scheduled to visit Bangladesh to discuss the loan in the second week of January but it deferred the visit because of the volatile political situation in the country at that time.

An official said the BMRE work was likely to raise the annual production capacity of the refinery, a subsidiary of the Bangladesh Petroleum Corporation, to 30 lakh tons. The ERL came into operation in 1968.

ADB to Provide $465m for Country’s Power Sector

The Asian Development Bank (ADB) is set to provide $465 million fund for the development of Bangladesh's power sector, taking into consideration the present interim government's ongoing reform agenda for renovating the sector.

"We hope that the reform agenda announced by the caretaker government for the development of the country's ailing power sector would encourage the ADB to sanction the proposed fund promptly," a senior Power Division official said.

He further said the fund was to get approval from the ADB Board earlier, it did not happen mainly due to the country's latest political deadlock coupled with a slow pace in the implementation of the existing projects.
Another official informed that an ADB delegation would arrive in Dhaka shortly to review the government's various reform initiatives and to discuss about the proposed funding arrangements. The official also indicated that the proposed fund was expected to get approval by the ADB at its next board meeting.

Petrobangla Looks for Promoters for 3rd Round Bidding

Petrobangla has sought the Energy Division's nod for engaging promoters and consultants in the third round bidding for hydrocarbon exploration in offshore blocks.

It recently sent a proposal to the division in this regard. Petrobangla is preparing for an international tender for exploring hydrocarbon in 26 offshore blocks covering around 106,000 square kilometers areas along the Bay of Bengal.

As per the Petrobangla proposal, the promoters would arrange road shows in different countries for attracting international oil and gas companies to participate in the bidding. A team of local and foreign experts would set marking criteria for intending bidders and evaluate their offers.

Officials of the Energy Division and Petrobangla at a preparatory meeting discussed the proposal for appointing promoters and consultants for the bidding. They would finalize the proposal in the next official level meeting before placing it to the newly inducted Energy Advisor, Tapan Chowdhury.

A complete bidding proposal including the modified structure of the production sharing contract and tender documents, once vetted by the Law Ministry, would also be placed to the Energy Advisor.

The documents were submitted to the Law Ministry about four months back. But the energy officials were not certain about the vetting as the Law Ministry asked for clarification about several points, especially the proposed changes in the existing PSC.

Energy Division Presses for Fuel Price Hike Again

The Energy Division has urged the Ministry of Finance to make upward adjustment of fuel oil prices to help the state-owned Bangladesh Petroleum Corporation (BPC) reduce its losses.

In a meeting with Finance and Planning Advisor Mirza Azizul Haq, Energy Advisor Tapan Chowdhury sought assistance to implement the existing fuel oil adjustment formula.

The government has long been implementing the existing fuel oil adjustment formula and reviewing the price situation in every six months.

The Energy Division wants implementation of the existing fuel oil adjustment formula so that the monthly losses incurred by the BPC are reduced. However, response from the Ministry of Finance to such appeal could not be known.

The last adjustment in prices of fuel oil made by the immediate past government led by four-party alliances was in June 2006.

Tata Backs $3 b Project in Bangladesh

India's Tata Group said it is still considering investing $3 billion in steel, gas and power projects in neighboring Bangladesh, after mounting political unrest caused nationwide elections to be scrapped.

“When there is somebody to talk, they know where we are,'' Alan Rosling, Executive Director at Tata Sons, the holding company for the Tata Group of companies, said in New Delhi.

Mumbai-based Tata Group, with interests ranging from computer software to steel, had planned to set up a steel plant with an annual capacity of 2.4 million metric tons. It plans to run two power plants, a fertilizer plant making 1 million metric tons of urea annually and an opencast coal mine in Bangladesh.

The projects, first proposed in October 2004 and revised in April this year to reflect the Tata Group's higher financial commitment, are aimed at expanding the group's manufacturing footprint beyond India, while giving Bangladesh a buyer for its untapped gas.

4 Exploration Licenses in 3 Weeks

Former Energy Advisor Major General (retd) Ruhul Alam Chowdhury, during his brief tenure, issued four licenses to unknown companies for exploration of mineral resources. The level of activity was a marked contrast to that in the previous five years when only three exploration licenses were issued -- one to Asia Energy in 2002, one to Australian Titanium Resources in 2003 for Cox's Bazar beach sand and the other to Hosaf in 2003 for Khalashpir coal zone.
Chowdhury spearheaded issuance of four licenses to three companies -- Bangladeshi KDS Group, Australian Premier Minerals and British Carbon Mining.

The KDS group was given license on January 11 for heavy metal exploration in 3,500 hectares of land in Mithapukur of Rangpur. On December 24 last, Premier Mineral was awarded two licenses for exploration of heavy mineral beach sand in Cox's Bazar. One license allows it to explore 3,986 hectares of land in the beach and the other 4,000 hectares in shoal or island areas in the bay. At the same time, Carbon Mining was given license to explore heavy metal in 4,000 hectares of land in Chilmari area of Kurigram.

Such licenses are issued for one year. But typically they get renewal every year unless the explorers violate any rules or contractual obligations.

Bibiyana Goes into Production by March

The current gas crisis may ease within next two months as the country's second-largest gas field Bibiyana is likely to go into production in the first week of March.

Both Petrobangla and Chevron officials said that, initially, the field would produce 200 million cubic feet (MMCF) natural gas per day to feed the national grid, which they hoped would resolve the present crisis.

They said that at present the country is producing about 1,500 million cubic feet per day (MMCFD) gas against a demand for 1,600 MMCFD.

Earlier, the US-based Chevron, the developer-cum operator of the gas field located in block 12 in the northeastern district of Habiganj, had scheduled the commissioning by early December of last year.

But Chevron missed the schedule due to the country's political situation that disrupted its mobilization of equipment and manpower to and from the project site.

ADB to Study Power trade to Afghanistan, Pakistan

An Asian Development Bank (ADB) funded feasibility study will prepare a proposed power trading project that would, in its initial stages, earn revenues for the Kyrgyz Republic and Tajikistan by allowing them to initially export 1,000 megawatts of electricity to Afghanistan and Pakistan, where there are significant energy shortages.

In this regard, ADB is providing a $3 million technical assistance grant to study the potential for regional electricity trading that would help optimize the utilization of power resources in both Central and South Asia, according to an ADB decision.

The ADB, European Bank for Reconstruction and Development, Islamic Development Bank, and World Bank along with bilateral and private sector stakeholders have been participating and assisting the Multi-Country Working Group in their consideration of the project.

“The Multi-Country Working Group has taken important steps toward regional cooperation in power trade and ADB is pleased to contribute through this study to support their efforts to progress to the next stage in project development,” says F. C. Kawawaki, an ADB Senior Investment Specialist.

Iran, India, Pakistan Agree on Gas Pricing Formula

Officials from Iran, India and Pakistan have agreed on a pricing formula for the export of Iranian gas to meet India’s burgeoning energy demands, said an Iranian oil official.

“After years of efforts we could reach an understanding in terms of a pricing formula,” said Hojatollah Ghanimi-fard, Director of International Affairs at the National Iranian Oil Company.

“The three sides will take this proposal, this agreement to their (governments) and we hope to take the next steps after they give their opinions,” Ghanimi-fard said after three days of negotiations with Indian and Pakistani officials in Tehran.

“The three sides have one month to respond,” he added, without elaborating on the terms of the accord.

He hoped the three countries can ‘take all other measures’ by the end of June in the next round of discussions. Talks on the proposed multi-billion-dollar pipeline—to supply Iranian gas to India through a 2,600-kilometre (1,600-mile) pipeline via Pakistan—began in 1994.