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Bangladesh Gas Fields Company Limited for the Asian Development Bank

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Bangladesh Gas Fields Company Limited for the Asian Development Bank Initial Environmental Examination Document Stage: Update Project Number: P45203 (BAN) September 2016 People’s Republic of Bangladesh: Natural Gas Infrastructure and Efficiency Improvement Project (Component 1 - Installation of Wellhead Gas Compressors at Location “A” of Titas Gas Field) Prepared by Bangladesh Gas Fields Company Limited for the Asian Development Bank. This is an updated version of the draft originally posted in August 2016 available on https://www.adb.org/sites/default/files/project-document/190161/45203-006-iee-01.pdf. CURRENCY EQUIVALENTS (as of 3 August 2016) Currency unit – Taka (Tk) Tk 1.00 = $0.012755 $1.00 = Tk78.40 ABBREVIATIONS ADB - Asian Development Bank AIIB - Asian Infrastructure Investment Bank BGFCL - Bangladesh Gas Fields Company Limited CITES - Convention on International Trade in Endangered Species of Wild Fauna and Flora DOE - Department of Environment EA - Executing Agency ECA - Environment Conservation Act ECC - Environmental Clearance Certificate ECR - Environment Conservation Rules EIA - Environmental Impact Assessment EMP - Environmental Management Plan EMRD - Energy and Mineral Resources Division ESMS - Environment and Safety Management System GoB - Government of Bangladesh GRC - Grievance Redress Committee IEE - Initial Environmental Examination LCC - Locational Clearance Certificate MOEF - Ministry of Environment and Forests MPEMR - Ministry of Power, Energy and Mineral Resources NOC - No Objection Certificate PIU - Project Implementation Unit ROW - Right of Way SPS - Safeguard Policy Statement WEIGHTS AND MEASURES oC - degree Celsius dB(A) - A-weighted decibel ha - hectare Hp - horsepower lahk - 100,000 ppb - parts per billion ppm - parts per million µg/m3 - microgram per cubic meter m2 - square meter NOTE In this report, "$" refers to US dollars. This initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section of this website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. TABLE OF CONTENTS Page No. EXECUTIVE SUMMARY 1 1.0 BACKGROUND 7 1.1 Overview of the Project 7 1.2 Environmental Requirements for the Project 7 2.0 POLICY, LEGAL, AND ADMINISTRATIVE FRAMEWORK 8 2.1 Environmental Requirements of Bangladesh 8 2.1.1 Environmental Agency 8 2.1.2 Applicable Environmental Regulations 8 2.1.3 Relevant International Environmental Agreements 11 2.2 Environmental Requirements of Asian Development Bank and the Asian Infrastructure Investment Bank 14 2.2.1 Asian Development Bank 14 2.2.2 Asian Infrastructure Investment Bank 15 2.3 Compliance of Component 1 to Environmental Requirements 18 2.3.1 Requirements of DOE 18 2.3.2 Requirements of ADB 19 3.0 DESCRIPTION OF THE PROJECT 19 3.1 Need for the Project 19 3.2 Location of the Project 19 3.3 Major Components of the Project 21 3.4 Reciprocating Compressor 23 3.5 Environmental Considerations 25 3.6 Proposed Project Schedule 25 3.7 Project Activities 26 3.7.1 Pre-construction phase 26 3.7.2 Construction phase 26 3.7.3 Operation phase 28 3.7.4 Decommissioning phase 28 4.0 DESCRIPTION OF THE ENVIRONMENT (BASELINE DATA) 29 4.1 The Titas Gas Field 29 4.2 Existing Natural Gas Process Plant at Titas Gas Field 29 4.3 Physical Environment 30 4.3.1 Topography 31 4.3.2 Climate 31 4.3.3 Air quality 31 4.3.4 Ambient noise 32 4.3.5 Soil type 32 4.3.6 Seismicity 33 4.3.7 Water resources 34 4.4 Biological Environment 35 4.4.1 Terrestrial Habitat 35 4.4.2 Aquatic Habitat 36 4.5 Socio-economic Condition 36 5.0 ANTICIPATED IMPACTS AND MITIGATION MEASURES 37 5.1 Pre-construction stage 40 5.2 Construction stage 40 5.2.1 Site preparation and transport of construction equipment and materials 40 5.2.2 Installation and testing of compressors and ancillary equipment 42 5.3 Operation stage 43 5.4 Decommissioning stage 45 6.0 ANALYSIS OF ALTERNATIVES 46 7.0 INFORMATION DISCLOSURE, CONSULTATION, AND PARTICIPATION 48 8.0 GRIEVANCE REDRESS MECHANISM 49 8.1 Existing Structure of Handling Grievance at BGFCL 49 8.2 Handling Grievance as Required by SPS 2009 49 9.0 ENVIRONMENTAL MANAGEMENT PLAN 50 9.1 Implementation Arrangements 50 9.2 Environmental Safety Management System (ESMS) at BGFCL 51 9.3 Safety and Hazard Mitigation Plan at BGFCL 52 10. CONCLUSION AND RECOMMENDATION 60 List of Tables Table 1.1 Project Details 7 Table 2.1 Relevant National Regulations, Laws and Policies 9 Table 2.2 Bangladesh Relevant International Environmental Agreements 11 Table 2.3 Environmental Classification According to SPS 2009 14 Table 2.4 Draft Environmental Classification of AIIB 15 Table 2.5 Comparison of Environmental Safeguard Principles 16 Table 3.1 Features of the Compressor 22 Table 3.2 Chemical Composition of Natural Gas in Titas Gas Field 22 Table 3.3 Project Implementation Schedule 25 Table 4.1 Soils Sampling Analysis, Location A 33 Table 6.1 Comparison of “With Project” and “Without Project” Options 47 Table 7.1 Summary of Initial Consultation 48 Table 9.1 Environmental Management Plan 53 Table 9.2 Environmental Monitoring Plan 59 List of Figures Figure 2.1 ECC Application Process for Red Category Project 9 Figure 3.1 Location of Titas Gas Field 20 Figure 3.2 Location of Component 1 20 Figure 3.3 General Layout of Compressors 21 Figure 3.4 Proposed Layout of Component 1 with Existing Facility 24 Figure 3.5 Photograph of Reciprocating Compressor 24 Figure 4.1 Plant Layout of Existing Facility at Titas Gas Field 30 Figure 4.2 Natural Gas Process Plant at Titas Gas Field 30 Figure 4.3 Climate Map 32 Figure 4.4 Seismic map of Bangladesh 34 Figure 4.5 Vegetation in Location A, Titas Gas Field 36 List of Annexes Annex 1 Relevant Environmental Quality Standards of Bangladesh 61 Annex 2 Photographs during site visits to BGFCL on 22-24 August 2016 68 Annex 3 Chance Find Procedure Annex4 Public Consultation 70 Annex 5 No Objection Certificate from the Local Authority 74 Annex 6 Safety and Hazard Mitigation Plan at BGFCL 75 EXECUTIVE SUMMARY Introduction 1. The Project will be funded by Asian Development Bank (ADB) with cofinancing from the Asian Infrastructure Investment Bank (AIIB) at an estimated total cost of $447.6 million. 2. Component 1 of the Project will involve the installation of wellhead compressors at Location – A of Titas Gas Field. The Executing Agency (EA) for Component 1 is Bangladesh Gas Fields Company Limited (BGFCL), which is one of the operating companies of the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) under the Energy and Mineral Resources Division (EMRD) of the Ministry of Power, Energy and Mineral Resources (MPEMR). BGFCL is entrusted with the production of natural gas from its five producing fields and processing of gas to the transmission pipeline system. 3. Commercial gas production at the Titas Gas Field began in April 1968. Over time, wellhead pressure of wells has been decreasing at an average annual rate of 90 pounds per inch (psi) and within the next 3-5 years, it is estimated that natural gas flow can no longer maintain the gridline pressure without the installation of compressors before the existing natural gas process plants at Location A in the Titas Gas Field. Gas compressors will be essential to augment gas transmission capacity to meet the increasing gas demand. Project Description 4. Component 1 will be located in about 0.6 hectare (ha) of land within the existing facility owned by BGFCL at Location A of the Titas Gas Field. No unauthorized public access to Location A is allowed by BGFCL. The existing natural gas processing facility of BGFCL at Location A of Titas Gas Field consists of major equipment such as eight glycol dehydration units, four low-temperature separation (LTS) units, and two LTS units with glycol injection. Two fractionation units separate the condensate, which is a by-product of gas processing, into liquid fuel as motor spirit (MS) and high speed diesel (HSD). MS and HSD are sold to Padma Oil Company Limited, and Meghna Petroleum Limited. The two gas treatment plant and one of the fractionating plants were financed by ADB.1 5. Component 1 will consist of seven reciprocating compressors with a capacity each of 60 million standard cubic feet (MMSCF) per day of natural gas. Five compressors will be operating at a time while two compressors will be standby. The compressors will require 5 MMSCF of natural gas daily as fuel for its operation and 16 tons of water per day for its closed recirculating cooling water system. Water requirements will be provided through borehole/deep tube well from the existing BGFCL natural gas processing plant facility. Make up water for the cooling system will be required only when leakage has occurred at pump packings through years of operation or when water has been drained to allow system repair. The daily output capacity of compressed gas from these compressors will be 300 MMSCF. Activities associated with the installation of the compressors from construction, testing and/or commissioning, and operation will follow relevant regulations of the Government of Bangladesh (GoB) and applicable industry and international standards. 1 ADB. Project Performance Audit Report on the Second Natural Gas Development Project. November 1997. Loan 714-Bangladesh: Second Natural Gas Development Project.
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