Energy Bangla

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Dhaka Sunday,  Jun 24, 2018

Gazprom Deal To Cost ‘Tk 115cr More’


The much-talked-about gas discovery at Bhola will turn out to be rather expensive for the nation, as Russia’s Gazprom has been given the drilling assignment at almost double the cost of the proposal submitted by the state-run Bangladesh Petroleum Exploration and Production Company Ltd (Bapex), sources said. Again, while the Russian energy giant has taken more than Tk 115 crore for the job, it is not doing anything itself, sources alleged.

Sources said the two wells at Shahbazpur East-1 and Bhola (North)—which were awarded to Gazprom—are not being drilled by the Russian company itself. It has simply given it to the US-based Halliburton and ERIELL for carrying out all drilling activities.

Interestingly, through seismic surveys, some structures—which include the newly-discovered fields—were detected by Bapex. The government, however, awarded the drilling of the wells to Gazprom without any cogent reason.

Energy expert and Bangladesh University of Engineering and Technology (BUET) professor Dr M Tamim told, “It is very pathetic that Bapex’s detection of gas structures was given to Gazprom, which clearly indicates that public money has been wasted, or that the money could be laundered in another country. Otherwise, I don’t see any reason why the job should be given to Gazprom.”

“By giving the assignment to Gazprom, it is clear that the state-owned exploration company Bapex is not being treated in a proper way, as it should be,” he added.

He said two years ago, Bapex carried out a 600-KML 3D seismic survey across Bhola region and got some positive signs of gas with the final report of the survey. After the completion, Bapex designed two wells—at Shahbazpur East 1 and Bhola (North)—with a budget of Tk 156 crore. They were hopeful as they were planning to drill the location, which has bright prospects.

In 2016, Bapex submitted a proposal worth Tk 156 crore for the wells. But suddenly, on September 5, 2016, Gazprom evinced interest and submitted a proposal before the Energy Division’s proposal process committee to consider its proposals.

The committee was informed that Gazprom was not interested in participating in an open bidding process but had evinced interest to get the unsolicited contract of the drilling of the Shahbazpur East-1 and Bhola (North) wells.

Bapex’s technical committee informed the government that Gazprom did not even submit any proper proposal which included any item price.

The technical committee submitted the two proposals of Bapex and Gazprom, with a comparison of the prices of two well drillings at Shahbazpur East-1 and Bhola (North).

At that time, Bapex proposed Tk 78.41 crore for Shahbazpur East-1 and Gazprom proposed Tk 131.18 crore for the same job.

For the Bhola (North) well project, Bapex wanted to complete the project with an amount of Tk 78.41 crore whereas Gazprom proposed a sum of Tk 139.79 crore.

Finally, the Energy Division awarded the project to drill two wells in Bhola to Gazprom without assigning any reason.

“We are capable of drilling such kinds of wells as we have done it before,” said Bapex Managing Director Nawshadul Islam.

“Gazprom is an exploration and development company. I don’t know at this stage why the Energy Division awarded it to Gazprom. It is clear that some corrupt people could have envisaged this deal,” Dr Tamim alleged.

An Energy Division official said Gazprom has done nothing at all and instead awarded the job to others.

In Bhola, Halliburton is doing logging and other tests while ERIELL is covering the drilling site and others.

“If Gazprom awarded it to a US company, then why should Bapex not do it? It is an issue of patriotism, if nothing else,” Tamim added.

Explaining the govt stance, the Energy Division official said: “The Bhola area is a prospective area for gas and the government wanted to explore it as early as possible and within a short time, but as Bapex was not free to do the job, Gazprom was awarded the contract.”

A Bapex official said the concept to make haste was wrong as the existing Shahbazpur field is not at full production as there is low demand at the island. Shahbazpur field produces 39.90mmcf of gas, with a daily capacity of 50mmcf.

On the other hand, the Power Development Board (PDB) has signed a power purchase agreement (PPA) with Nutan Bidyut Bangladesh Limited to set up a 220MW power plant in Bhola.

Nutan Bidyut is a subsidiary of Indian corporate giant Shapoorji Pallonji Infrastructure Capital Company Ltd. The combined-cycle power plant will be an independent power producer (IPP) that will sell electricity to the PDB for 22 years. Authorities estimate the plant will supply the national grid by December 2019.

On 22 October 2017, Cabinet secretary M Shafiul Alam informed journalists that a new field has reserves of about 700 billion cubic feet of natural gas. This new gas field—Shahbazpur Gas Field East-1—is three-and-a-half kilometres east of the Shahbazpur Gas Field, officials said.

Explorers struck gas some 32km north of the Shahbazpur field in the southern coastal district of Bhola. A total of 600 billion cubic feet of gas has been found in Bheduria union.

Bhola has two power plants with the capacity to generate 225 megawatts (MW) and 30.5 MW. These use gas from Shahbazpur.

When contacted, Albert Costa, Bangladesh Representative of Gazprom, said, “We are doing nothing illegal as everyone including Bapex assigns third party. So what’s wrong if we appoint a US firm like Halliburton?”

UNB adds: Gas extraction from one of the wells of the new gas field, Bhola North-1, began on an experimental basis yesterday.

This is the 2nd gas field in the district and 27th in the country.

The gas extraction began with lighting fire through DST-1 at Majhirhat village in Sadar upazila when top officials of Bangladesh Petroleum Exploration and Production Company Limited (Bapex), including its managing director Md Nowshad Islam, were present.

Around 20-25 million cubic feet per day (mmcfd) of gas will be produced from the well, the Bapex chief said, adding that the field might contain 600 BCF gas.

Earlier in August 2017, Bapex discovered another new gas field, Shahbazpur East-1, in the district where some 700 billion cubic feet of gas was expected to be reserved.

The Independen

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