Gas Import from Myanmar

Energy Bangla report indicates that Bangladeshi private sector entrepreneurs have started showing interest about gas from Myanmar. With the growing uncertainties in the Gas supply to the industrial city, Chittagong and abundance of Gas in the next door neighbor Myanmar it will be the only logical that commercial interest will prevail over other reasons. If the Bangladeshis get the huge lands on lease in Rakhaine for cultivation it will be only logical to set up additional Fertilizer Plants in Chittagong using Gas from Myanmar as the existing gas from Bangladesh National Grid will not support any additional Fertilizer or Power plant in the area for the time being.



The new Bangladeshi initiative in Chittagong area like deep water drilling and Cairn or Total drilling efforts in their allotted blocks are still a long away to bear the fruits. If Bangladesh can now build a pipeline from Rakhaine to Chittagong via Teknaf and Cox’sBazar it will open a new dimension in the gas based industrialization in the greater Chittagong region. It does not matter if Bangladesh discovers more gas in the region in future the gas pipeline will ensure Bangladesh gas market to access the reliable supply from Myanmar. Many countries of the world have huge energy reserve but for economic reasons and for future energy security they import from possible regional source. Think of USA. They have huge petroleum reserve – both oil and Gas. Still they are the largest importer of both. Their aggression in different places in the world and hide and seek game with Bin Laden basically emanate from their hunger for gas and oil. Bangladesh may take several years to explore its own frontiers for gas. But they can not afford the gas based economy to get starved and continue to struggle.



If one has opportunity to read the William Brothers appraisal report of Gas Supply to Chittagong Area based on which Bakhrabad Field development was taken up it will be found that several other gas based industries were taken into consideration. But other than CUFL, KAFCO and the remaining has not come up. It took about 25 years for the Chittagong market to grow to its full potential as conceived in late seventies. Even then national gas grid is struggling to meet the 280-300 MMCFD demand of Chittagong area. KAFCO second unit can not go ahead at Chittagong without assured supply of Gas. GOB proposed to KAFCO to set up the plant at Sirajgonj and assured to buy the entire production but KAFCO is not agreeing. TATA proposal for fertilizer plant at Chittagong may not proceed without assurance of gas supply. No major investor will dare investment in the Korean EPZ without stable power supply and gas supply in the area. These are only possible if adequate gas supply to generate additional power is available and if additional gas is available to fuel other industries. So in consideration of all above a large enough gas transmission pipeline capable of delivering 300-350 MMCFD gas without compression may be issue of discussion with Myanmar team when they arrive in Bangladesh soon.



The pipeline route may be Myanmar offshore i.e. Sittwe in the Rakhaine province to Chittagong via Tekhnaf and Coxsbazar. Gas to these areas will create avenues to industrially develop these two tourist resorts. One single gas field has reserve of about 5.8 TCF. Bangladesh government without bothering for donor funding may let private sector developers build transmission pipelines. In fact the government should only open the transmission segment for private sector. Private sector can either develop the pipeline themselves of let GTCL built and operate on their behalf. But whatever is the modus operandi it will require an agreement between the two Governments to agree on cross border trading of gas. If the negotiation starts straight way the contract may be concluded by January 2008 and it the construction of the pipeline starts in the winter of 2008 early Gas may be available by end 2009.



If the above situation can be reached Bangladesh may go for KAFCO second unit and any other major fertilizer, power and other gas based industries in Chittagong straight away. If Gas from Myanmar can cater bulk of the Chittagong requirement Gas of our National Grid can be utilized in the other areas without stressing our existing fields too much and thereby causing damage to the reservoirs. This move may get serious resistance from certain quarter which is beneficiaries of IOC operations in Bangladesh. But just realize Bangladesh is struggling in meeting the payments of IOCs now. Their share in national supply is 43% and growing. Right now the only possible increase of supply is from Bibiyana . So soon the IOC share may exceed 50 %. Bangladesh can not afford to increase its gas price every now and then.



Our gas demand is increasing @ 10% annually. It is very much linked with the growth of GDP. If investors are ensured of uninterrupted power supply as well as gas supply our GDP may see double digit growth in a couple of years. Let us now think of a situation like this in our Gas mix for a while till we have different scenario.



Petrobangla Gas 50%

IOC Gas 40 %

Import 10%.



In 20011 our Gas demand may be 3500 MMCFD. In that case if the import is 350 MCFD and our own production will be 1750 MMCFD. This may not stress our reserve and resource to a level of panic as being apprehended now. In the meantime exploration may change the scenario. But whatever happens we should approach gas import initiative from Myanmar with open mind and try to have a win- win deal. Import of Gas Myanmar will be much easier than setting up power plant and import power from there.



Let me tell about the North American situation. Canada exports gas to USA from Alberta through Alliance and Other pipelines and then imports also in through other borders. Same is the situation of export import between Mexico and USA. So in situation may alter cases .Who knows?