Donors to Discuss Gas Exports

Export of natural gas, graft, crime and political tension are likely to be high on the agenda when cash-strapped Bangladesh's donors meet on May 8. The three-day annual meeting sponsored by the World Bank will review the government's performance on the financial and other sectors for which it receives aid and identify new areas for assistance.
“We look forward to this dialogue with the government and there will be criticism, but constructive ones,” Jorgen Lissner, the United Nations Resident Representative in Dhaka was quoted by local and foreign media as saying.
The World Bank in a published draft agenda for the meet said “disruptive politics, poor law and order and corruption are development issues that deter investors and affect the poor particularly harshly.”
According to international press, the United States and other major donor countries have been pressing Bangladesh to earn much-needed income by beginning to export natural gas, most likely to neighboring India.
Some donors “think Bangladesh is sitting on a gold mine and do not understand why you don't tap in to it," Lissner said. But leading Bangladeshi politicians stridently oppose exporting natural gas, saying it jeopardizes the country's security in energy.


Extended PSC for Tullow

The Board of Petrobangla, the state-run oil-gas corporation, has approved a proposal of Tullow Oil plc to extend its production sharing contract (PSC) for blocks 17 and 18 for two years. Now the final approval will be given by Energy and Mineral Resources Division. The extended period will be effective from the date of signing of an agreement between Tullow and Petrobangla.
Officials said the extension is being given after the Irish oil company agreed to waive US$ 8.5 million in past well costs from the cost recovery pool under the PSC.
Earlier, the Energy Ministry gave Petrobangla an informal go-ahead as a fresh PSC with any other international oil company (IOC) for the blocks is not possible at this moment due to a bar from the High Court.
"If the PSC is not extended, the blocks would remain like abandoned. On the other hand, the extension will bring royalty for the blocks as well as the waiver from the cost recovery," said a senior official at Petrobangla.
As the PSC for the blocks 17 and 18 expired on January 17 this year, the Tullow sought the extension proposing the self-announced condition of waiving US$ 8.5 million in past well costs. The total cost recovery pool for the PSC stands at US$ 24.2 million.
Additionally, Tullow has proposed that if during the period of the extension, a precedent is set by any other executed agreement to waive some or all of past costs in respect of any other PSC extension in Bangladesh, it would undertake to match the percentage of past cost waived in its agreement for the two blocks.
Tullow however had sought the extension no later than March 31 as "it had a very tight weather-related window in which it can carry out the fieldwork element of the work program and achieve this before wet season in 2004".


Power Disruption Again

Parts of capital Dhaka including the Prime Minister's Office and the Secretariat on April 8 experienced a blackout when one of the city's major power transmission lines tripped due to a trouble originated at a substation.
Officials at Power Grid Company of Bangladesh (PGCB), responsible for the transmission system, said the problem erupted at 1:03pm when a CBT (a technical equipment) at Maghbazar substation got damaged.
It had cascade effect on the Ulan-Rampura transmission network, causing a trip on one of the transmission lines, they said. The engineers have repaired the transmission line, but trouble continued at Maghbazar substation for many more hours.


Ministry Accepts Petrobangla Projection

The Energy and Mineral Resources Division has accepted Petrobangla's explanation on gas demand projection and dropped a move to take action against officials for making “wrong forecast”.
As the country is about to face a gas shortage and Petrobangla's forecast on average demand was much lower than the present consumption, State Minister for Energy AKM Mosharraf Hossain had asked the corporation to submit a report.
In response, the Petrobangla showed documents that it had correctly projected the highest demand in this season which would be 1,346 MMCFD and peak demand in a particular time of the day 1,406 MMCF. Against the demand scenario, the Petrobangla documents showed its preparations were to ensure 1,329 MMCFD and on March 28 it had the ever highest supply of 1,325 MMCFD.


BGMEA & BCI on Gas-Power Tariffs

Bangladesh Garments Manufacturers and Exporters Association (BGMEA) has suggested reduction of charges of ports, gas, electricity and bank interest rates to make the RMG sector competitive in the global market. The BGMEA made the suggestion in its first meeting with new Commerce Minister Air Vice Marshal (retd) Altaf Hossain Chowdhury at his office recently. BGMEA President Annisul Huq in the meeting also made several other recommendations to make the country's RMG sector more competitive to face the post-MFA period.
Meanwhile, Bangladesh Chamber of Industries (BCI) has suggested enhancing prices of gas, power and diesel once every five years instead of rising the tariffs at regular interval. The BCI proposal came along with many other suggestions it made in a written set of recommendations to the government ahead of the next national budget. It also observed that political unrest and deterioration in law and order was obstructing the harness of the potentials of the economy. Without improvement of law and order, production in mills and factories and marketing of industrial products might reach a dangerous stage, it warned.


ONGC Discovers Gas in Tripura

The Oil and Natural Gas Corporation (ONGC) Ltd of India has discovered gas reserves at Khedabari village in Sonamura sub-division of West Tripura district with a production capacity of over 200,000 cubic meter per day.
ONGC Director (Exploration) Y B Sinha said during drilling up to 2,550 meter which started on June 3 last year the well showed commercial gas in three zones. The discovery of gas is very important in view of the 280-MW power plant coming up in the area near Monarchak being established by North-East Electric Power Corporation (Neepco), he said.
Sinha said the ONGC would soon start seismic survey in Mizoram and striking oil in Nagaland. He said more than 300 tons of oil were produced every day from Nagaland but the activity of ONGC had stopped during 1994-95 owing to Naga insurgency. “It would resume soon.”
He said the ONGC had discussed the matter with the Indian central government and Chief Minister of Nagaland and both sides showed interest in this regard.


Power Crisis Looms in Philippines

The Philippine power industry must act now or face a nationwide electricity crisis by 2007, a senior executive has warned.
First Generation Holdings President Federico Lopez said the sector was not attracting much-needed investments to bankroll additional capacity to avert crippling blackouts.
Since new plants could take at least four to five years to finance and build, he said it might be “already too late to avoid crises in many parts of the country”.


39 Killed in Russian Coal Mine Blast

An explosion rocked a Russian coal mine on April 10 killing at least 39 workers. The blast occurred at a depth of 1,840 feet, and was believed to have been caused by a methane buildup. The shaft was filled with carbon dioxide, the Interfax news agency reported.
Accidents are common in the Russian coal industry. In September 2002, one miner at Taizhina was killed. An explosion killed five miners at a Kemerovo region in January. Another methane blast caused a ceiling collapse that killed 12 workers at another mine in the region last June. In October, icy water flooded a mine in southern Russia, killing two men.
Coal mining remains one of the most dangerous jobs in poor countries. On April 10, an explosion at a mine in the northeastern Chinese city of Jixi trapped five miners underground. Last year, more than 6,700 deaths were reported in explosions, cave-ins and other disasters in Chinese mines.
Meanwhile, a Bangladeshi worker was killed in an accident at Barapukuria coal mine on April 14. The worker Anwarul Haq hailed from Parbatipur in northern Dinajpur district.


Total's Award Giving Ceremony

An Award giving ceremony for Totalgaz dealers of Dhaka, Tangail and Gazipur districts was held at a restaurant in Dhaka recently. Some 60 Totalgaz dealers were present in the function. Attractive prizes were awarded among the successful dealers for their performance.
Total Bangladesh Managing Director & CEO B Vijay Kumar, its Head of Marketing & Sales Monzur Morshed Siddiqui and Area Sales Manager Jahangir Alam were present.


BP Plant Opened in Vietnam

A 450 million-dollar gas-fired power plant in Vietnam, built and owned by British energy giant BP and other foreign investors was officially opened recently. The Phu My 3 power plant is located in the southern coastal province of Ba Ria-Vung Tau, south of Ho Chi Minh City.
The plant has a design capacity of 716.8 megawatts and has raised Vietnam's power generation capacity by almost 10 percent, the Phu My 3 BOT Power Co. Ltd. said in a statement.
The plant, which is able to consume about three million cubic meters of gas per day at full load, is the first foreign-invested build-operate-transfer power plant in the socialist nation.
It is equally owned by units of BP, Singapore's SembCorp Industries and the Japanese consortium of Kyushu Electric Power Co. and Sojitz Corp.
“We have been toiling day and night with an aim to bring the largest private sector power plant into operation to meet the increasing demand for power of the country and our mission has been accomplished," said Mary Shafer-Malicki, Director General of BP Vietnam.
The plant, which took 26 months to build, is fuelled by gas from the Nam Con Son basin, 370 kilometers of the coast, under a 20-year agreement with the state-owned PetroVietnam. After that, it will be handed over to the Vietnamese government.
The 1.3-billion dollar Nam Con Son project is led by BP. PetroVietnam, India's ONGC Videsh and ConocoPhilips of the United States are the other investors.
Electricity demand has risen on average by 13 percent to 15 percent annually in the past few years in Vietnam creating urgent need for more infrastructure development.
According to government estimates, about 70 billion to 80 billion kilowatts of power will be needed in 2010, with the figure increasing to between 160 billion and 200 billion kilowatts by 2020.


Pak Gas Pipeline Projects Attract Investors

The Gulf-based investors would finance the regional gas and transportation links in Pakistan, particularly focusing on pipelines and Gwadar port. “Investors from the United Arab Emirates (UAE) are exploring possibilities of investing in the gas infrastructure for effective networking of gas transmission through pipelines from the western borders,” a statement of the Pak Ministry of Finance said.
It also announced the establishment of Interstate Gas Company to manage the project for gas imports into the country and for onward exports to the other countries of the region.
The statement added that Trans-Asia will formally sign an agreement with Sui Northern Gas Pipeline (SNGPL) and Sui Southern Gas Company (SSGC) to conduct a feasibility study in this regard.
Pakistan is keenly pursuing import of gas from Turkmenistan and Iran to meet rapidly growing domestic consumption, with forecasts of gas shortages in the medium-term.
Reports said efforts are also being made for onward extension of such regional pipelines to India, which is a major energy deficient country and relies on expensive imported fuel oil.
Sheikh Abdullah bin Ahmed Al-Ghurair, Chairman Al-Ghurair Group of Companies, discussed oil and gas sector investment opportunities with Finance Minister Shaukat Aziz.
Al-Ghurair Group is engaged in construction of 125-MW gas-fired power station at Mari. The group is also actively considering to construct a coastal refinery at Gwadar, and exploring other investment opportunities in the oil, real estate and financial sectors.


Thai State Power Firm's Board Quits

The Board of Directors of Thailand's state electricity monopoly and country's largest energy utility have resigned en masse over their failure to control fierce protests which stalled its privatization plans.
The 11-member Board of the Electricity Generating Authority of Thailand (EGAT), the government's biggest revenue earner, stepped down following a government order to clean house after weeks of demonstrations led by EGAT's labor union postponed its sell-off.
“The workers no longer have any confidence in me, although I have tried to do my best,” outgoing EGAT governor Sitthiporn Ratanopas was quoted as saying in the Nation newspaper.
Observers said Prime Minister Thaksin Shinawatra's failure to resolve the problem could raise concern among foreign investors about Thailand's commitment to privatize other state-owned companies in the telecommunications and transport sectors.
“The protesters aren't willing to talk with EGAT's executives. If the situation drags on, it could become worse. So I have decided to resign before the end of my term,” Sitthiporn Ratanopas told reporters. His four-year term was supposed to end in September 2006.
Sitthiporn was also cleared of any wrongdoing after an official probe. The EGAT union had accused him of mismanagement related to a failed share swoop deal between EGAT and coal-mining and power company BANAPU. A report on a government investigation into the aborted transaction was submitted to the EGAT Board and it dismissed the charges.
Cherdphong Sirivith, who was stepping down as Chairman of the Board, said the government wanted new blood to help steer the energy giant to its eventual 25 percent listing on the stock exchange.
“We have to display our spirit by tendering the resignation so that the government can appoint a new Board to tackle the privatization of EGAT,” Cherdphong was quoted by the Nation daily.
Local media said EGAT Chairman Cherdpong Siriwit could be replaced by Chai-anan Samudavanija, a former Chairman of Thai Airways International.
The shake-up marks the latest in the battle over privatization which has been a major economic platform of Prime Minister Thaksin Shinawatra.
But the plans have met with vehement opposition from thousands of utility workers and union members who fear job cuts and an erosion of longstanding benefits.
They have mounted fierce demonstrations over the past month, some by more than 10,000 people. Thousands of workers of the EGAT, led by the country's strongest union, have been holding protests since February 23 against the government's plan to offer a 25 percent share of the company on the stock exchange.
The demonstrations are the biggest and most vocal public protests against Prime Minister Thaksin Shinawatra's government since it took power in a landslide election victory in 2001.
Thaksin insisted in March that Thailand's biggest stock market listing would go ahead in two months. He said the delay in the EGAT listing would allow it to establish an independent energy regulator and consult more fully with all parties.
Union leaders have vowed not to stand down until the plans were scrapped altogether or new public hearings were held.
Major sell-offs in Thai Airways, Airports of Thailand and energy concern PTT have been successfully completed. The railways, waterworks and telecommunications utilities are next in line.