0 NEDO-IC—00ER37 Feasibility Study on Ashuganj NGL Fractionation Plant March, 2001 New Energy and Industrial Technologies DeveIopment Organization (NED0) trusted to Japan Oil Engineering Co., Ltd. 020005045-8 Feasibility Study on Ashuganj NGL Fractionation Plant Entrusted to Japan Oil Engineering Company Limited March, 2001 Study Purpose: The COPS to the UNFCCC was held in Kyoto in December 1997, resulting in the adoption of the Kyoto Protocol. The Kyoto Protocol sets GHGs reduction targets of each developed countries intended to ensure the reduction of GHGs from developed countries at least by 5% from 1990 levels by the period from 2008 to 2012. Japan committed to the world a 6% reduction in the Protocol. This investigation implements the feasibility study on Ashuganj NGL Fractionation Plant Project which installed the Fractionation Plant for Petrobangla and it’s subsidiary company in Bangladesh to extract LPG for the public welfare, Motor Spirit and High Speed Diesel from NGL, and its’ implementation is expected to be authorized as the CDM program in future. Foreword This report presents the results of the feasibility study on Ashuganj NGL plant, which is entrusted to Japan Oil Engineering Company Limited by the New Energy and Industrial Technologies Development Organization (NEDO) as the body incharge in the implementation of “the Basic Survey Project for Joint Implementation, etc” in 2000. The third Session of the Conference of the Parties (COPS) to the United Nations Framework Convention on Climate Change (UNFCCC) was held in Kyoto in December 1997, resulting in the adoption of the Kyoto Protocol. The Kyoto Protocol sets Greenhouse Gases (GHGs) reduction targets of each developed countries. All of these targets are intended to ensure the reduction of GHGs from developed countries at least by 5% of the 1990 levels through the period from 2008 to 2012. Japan committed to the world a 6% reduction in the Protocol. Also, in the Kyoto Protocol, several international mechanisms was introduced in order to achieve the target smoothly including sharing of the reduction of GHGs, such as Joint Implementation (JI) between developed countries; and the Clean Development Mechanism (CDM) whereby developed and developing countries jointly reduce emissions. Moreover, the COP6 was held on November 2000 at Hague, Netherlands for the preparation of agreement of the details of Kyoto Protocol in order to achieve a prompt conclusion and publishing of the Kyoto Protocol. However the mutual consensus for the details of the Protocol was not finalized due to the many differences of opinion among the countries, such as the measures of absorption capabilities of forest, limitation of adoption and respect of Kyoto Mechanism, which were related to each other and the ideal method of supporting the developing countries. And therefore the discussion in COP6 would be carried over till around May - June 2001. This Feasibility Study, is intended to promote the project for the reduction of GHGs by the introduction and utilization of advanced technology of saving-energy and alternative petroleum energy together with the contribution of continuous - 1 - economic development in the partner country. The Study was executed as a worthful project under CDM project in the Basic Investigation Program of Joint Implementation in 2000 by the Japanese cooperative organization who intends to promote the implementation of project. This report is made as the result of Feasibility Study on the Ashuganj NGL Fractionation Plant, which produce LPG, Motor Spirits and High Speed Diesel from Natural Gas Liquid (NGL) that the NGL is not utilized properly in Bangladesh, and the plant will be constructed at Ashuganj where is considered the most convenient location for both producer of NGL and consumer. Japan Oil Engineering Company Limited having been entrusted by NEDO prepared this report along with a strong commitment to promote the implementation of Ashuganj NGL Fractionation Plant project with the cooperation of counterpart in Bangladesh, to contribute to the social economic development of Bangladesh as well as the restriction of deforesting and advanced utilization of energy through the implementation of project. Finally, we would like to sincerely express our deep gratitude to Messrs. Ministry of Energy and Mineral Resources, Petrobangla, and other concerned parties and organizations, who corporated with us in the data collection and providing valuable advices necessary for carrying out this feasibility study. March 2001 Hiroshi Takada, Project Manager Japan Oil Engineering Company Limited -2- List of Study Members Name Role and Major Works Hiroshi Takada Study Team Leader, Overall General and Project Coordination Shigenari Okubo Project Planning, Technical General Makoto Fuyumuro Project Planning, Facility Design Shinichi Nakamura Project Planning, Facility Design Toyoichi Takeda Project Planning, Facility Design Noboru Kubota Project Planning, Facility Design, and Effects of Project Takao Morita Project Planning, Facility Design, and Effects of Project Ryoji Ikuta Project Planning, Facility Design, and Effects of Project Atsuko Kinoshita Clean Development Mechanism -3- ABBREVIATIONS, UNIT and HEAT VALUE CONVERSION ABBREVIATIONS A-B Ashuganj - Bakhrabad (Pipeline) ADB Asian Development Bank ADP Annual Development Program A U Activities Implemented Jointly ALGAS Asian Least-cost Greenhouse Gas Abatement Strategy ASTM American Society for Testing and Materials BAPEX Bangladesh Petroleum Exploration & Production Company Ltd. B-B Ashuganj -Elenga (Pipeline) BCIC Bangladesh Chemical Industries Corp. BEPZA Bangladesh Export Processing Zone Authority BFA Bakhrabad Franchise Area BGFCL Bangladesh Gas Fields Company Limited BGSL Bakhrabad Gas Systems Limited BOD Biochemical Oxygen Demand BPC Bangladesh Petroleum Corp. BPDB Bangladesh Power Development Board BPI Bangladesh Petroleum Institute CER Certified Emission Reductions CDM Clean Development Mechanism CGS City Gate Station CNG Compressed Natural Gas CO Carbon Monoxide CO2 Carbon Di-oxide DME Di methyl Ether DOE Department of Environment DRS District Regulating Station ECNEC Executive Committee for National Economic Council EMRD Energy & Mineral Resources Division EPC Engineering, Procurement and Construction ERD Economic Relation Division ERL Eastern Refinery Limited FS Feasibility Study FY Fiscal Year -4- FYP Five-Year Plan GDP Gross Domestic Product GHGs Greenhouse Gases GIDP Gas Infrastructure Development Project GNP Gross National Product GOB Government of Bangladesh GSA Gas Sales Agreements GTA Gas Transportation Agreements GTCL Gas Transmission Company Limited GTP Gas Transmission Pipeline H2O Water HSD High Speed Diesel Oil ICB International Competitive Bidding ICS Intermediate Compressing Station IOC International Oil Company IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producer JBIG Japan Bank for International Cooperation JFA Jalalabad Franchise Area JGTDSL Jalalabad Gas Transmission & Distribution Systems Limited JI Joint Implementation JICA Japan International Cooperation Agency JOCL Jamuna Oil Co., Ltd. KAFCO Kamaphuli Fertilizer Co., Ltd. LNG Liquefied Natural Gas LPG Liquefied Petroleum Gas LPGAS LP-Gas Limited MOEF Ministry of Environment & Forest MOEMR Ministry of Energy & Mineral Resources MOF Ministry of Finance MPL Meghna Petroleum Ltd. MS Motor Sprits NEDO New Energy and Industrial Technology Development Organization NEP National Energy Policy NFPA National Fire Protection Association NGL Natural Gas Liquid -5- NGO Non-Governmental Organization NHs Ammonia NOx Nitrogen Oxides N-S North-South (Kailastila-Ashuganj) Pipeline ODA Official Development Assistance O&M Operation and Maintenance POP Project Concept Paper PETROBANGLA Bangladesh Oil, Gas & Mineral Corp. POOL Padma Oil Co., Ltd. PP Project Proforma PSC Production Sharing Contract R-A Rashidpur - Ashuganj RPGCL Rupantarita Prakritik Gas Co., Ltd RTU Remote Terminal Unit SCADA Supervisory Control and Data Acquisition SGFL Sylhet Gas Fields Limited SOx Sulfur Oxides SPEC Special Projects Evaluation Committee TBS Town Bordering Station TFA Titas Franchise Area TGTDCL Titas Gas Transmission & Distribution Company Limited UNFAO United Nations Food and Agriculture Organization UNFCCC United Nations Framework Convention on Climate Change UNOCAL Unocal Bangladesh, Ltd. UNIT and CONVERSION 1 atmosphere 14.7 psia 1 barrel (bbl) 0.159 cubic meter (m3) 1 British thermal unit (Btu) 0.252 kilocalories (kcal) 1 British thermal unit (Btu) 1.055 kilo Jouls (kJ) 1 cubic foot (CF) 0.0283 cubic meter (m3) 1 metric ton (mt) of oil, 7.4 bbl (0.85 specific gravity) 1 million standard cubic feet per day (MMSCFD) - 6 - 26,800 normal cubic meter per day (Nm3) 1kg 2.2 pounds (lb) 1 km 0.621 miles 1 inch 0.0254 m 1 pound per square inch (psi) 0.06895 bar 1 ton (t) 1,000 kg BCF billion cubic feet BPD barrel per day BSCF biUion standard cubic feet (109 ft3) Btu/CF British thermal unit per cubic feet Crore 107 (Bangladesh terminology) cst centistokes G giga (109 ) GPM gallon per minute GW gigawatt GWh gigawatt hour HHV High Heating Value (or Gross Heating Value) k kilo (103) km2 square kilometer kN kilo Newton KTA kilo ton per annum kWh kilowatt-hour Lakh 105 (Bangladesh terminology) LHV Low Heating Value (or Net Heating Value) M mega (106) MCM million cubic meter MM$ million US Dollars MMSCF million standard cubic feet MM SCFD million standard cubic feet per day Mtpy metric tons per year MW megawatt (1,000 kilowatts) Nm3 normal cubic meter (Gas volume at