Maximizing the Benefits from the Natural Gas Resources of Bangladesh
A Project Thesis by Moushumi Paul
_. IIIJ11111"IIUI"lr~llllIll. -, lI96016*
Department of Industrial and Production Engineering, BANGLADESH UNIVERSllY OF ENGINEERING AND TECHNOLOGY DHAKA ~ 1000
January, 2002
'.
,; The thesis titled - Maximizing the benefits from the natural gas resources of Bangladesh, Submitted by - Moushumi Paul, Roll No. 9408022 F, Session - 1993-94-95, has been accepted as satisfactory in partial fulfillment of the requirement for the degree of MASTER OF ENGINEERING in Industrial and production engineering on January 2002.
BOARD OF EXAMINERS
1. Dr.(&~ Md. Anwarul 1m: Chairman Professor Department of Industrial and Production Engineering BUET, Dhaka - 1000
2. (~o:'£1 Dr~'bolam Mohiuddin ; Member Professor Department of Industrial and Production Engineering BUET, Dhaka - 1000
3. (;;~~;~JfA-., Dr:MOhidd;Ahmed ; Member Professor, Head Department of Industrial and Production Engineering SUET, Dhaka - 1000 CANDIDATE'S DECLARATION
It is hereby declared that this thesis or any part of it has not been submitted elsewhere for the award of any degree or diploma.
Signature ofthe candidate:
( Moushumi Paul ACKNOWLEDGEMENTS
I would like to express my immense/heartfelt gratitude to Dr. Md. Anwarul Azim, Professor, Department of Industrial and Production Engineering (LP.E), BUET, for his advice, support, valuable guidance and encouragement throughout the progress of the project work.
I would like to acknowledge my deep sense of gratitude to Mosharraf Hossain Chowdhury, Chairman of PetrobangJa, Monzur Morshed Talukder, G. M. (Strategic Planning), Petro BangIa, Fazley Rubby, G. M. (Maintenance), KAFCD, Abdur Rahim, Manager (Technical Service), KAFCD, Jalal Uddin Ahmed Chowdhury, Executive Engineer (Mechanical Maintenance), Shikalbaha Power Station, Md. Taher, SubDivisional Engineer (60MW)Shikalbaha Power Station, Chittagong for providing me with necessary materials.
I would like to extend thanks and gratitude to Saiful Alam Chowdhury, Deputy General Manager (Distribution), BGSL & Dibakar Sengupta, Manager (Engineering Service), BGSL, Chittagong for encouragement and suggestions in accomplishing this work.
I would like to thank many individuals and organizations who contributed to the information contained in this work.
(i) ABSTRACT Bangladesh has 11.497 TCF of net recoverable gas. Twelve gas fields are producing about 1064 MMSCFIDay from 53 wells. (Gas is being utilized for generation of power, in fertilizer factories as feed stock and by other iFldustrial, commercial and domestic userj Does the utilization of the gas in the above purposes give the nation maximum benefit? Thc objective of this study is to harness maximum benefits from this huge gas resources. The alternative uses of the natural gas are examined to achieve its objective of the study. A method is developed to bring the benefits of the alternative uses of the natural gas to a common scale and to compare benefits. A term the "increased net value of the gas" through conversion into different products (INV,)is introduced to compare financial benefit. The products are arranged in the decreasing order of the increased net value and compare with the export valUe of the gas. Before any decision is taken to use gas for the best products, the domestic and/or external market of those products are searched. If there is a significant market demand for any of the product, then the searching is continued to find commercial proven processes of those products considering the economy of scale. During the selection process consideration of the environment and employment generation are also discussed. From this study it is found that methanol is the best product. INViformethanolis 3.97 US$/MCFand whichalso fulfillthe above criteriaofmarketdemand and economyof scale. eNG to replace petrol is the 2nd highest product because INVifor CNG to replace petrol is 3.2142 US$/MCF which also fulfills the above criteria power is the 3"\ highest product because INV;for power is 2.745 US$/MCF. CNG to replace diesel is the 4'h highest product because INVifor CNG to replace diesel is 2.586 US$/MCF which also fulfills the above criteria. For all the above four product, the increased net value of the gas is higher than the gas export value, GEV (2.50US$/MCF). Urea, anhydrous ammonia, LNG,- methanol to replace diesel and methanol to replace kerosene are not considered in the study because INVjfor all the product are less than 2.5 US$/MCF. (ii) TABLE OF CONTENTS
Title Page ACKNOWLEDGEMENTS (il ABSTRACT (ii) TABLE OF CONTENTS {iii} LIST OF TABLES (vi) LIST OF FIGURES (ix) LIST OF ABBREVIATIONS (x)
Chapter 1. BACKGROUND OF THE STUDY 01 2. SCOPE OF THE STUDY 03 2.1 Objective 2.2 Methodology 2.3 Assumptions of the methodology 3. NATURAL GAS RESOURCESOF BANGLADESH 09 3.] Different gas fields of Bangladesh 3.2 Gas compositions of various gas fields 3.3 Natura! gas network of Bangladesh 4. PRODUCTSFROM NATURAL GAS 21 4.1 Methanol 21 4.1.1 Uses and markets 4.1.2 Plant size and production process 4.1.3 Calculation of the increased net value of the gas through conversion into methanol. 4.2 Compressed Natural Gas (C.N.G) 29 4.2.1 Uses and markets 4.2.2 Production process 4.2.3 Calculation of the increased net value of the gas through conversion into compressed natura! gas (C.N.G). (iii) TABLE OF CONTENTS (Contd.)
Chapter Page 4.3 Anhydrous Ammonia 41 4.3.1 Uses and markets 4.3.2 Plant size and production process 4.3.3 Calculation of the increased net value of the gas through conversion into anhydrous ammonia. 4.4 Urea 47 4.4.1 Uses and markets 4.4.2 Plant size and production process 4.4.3 Calculation of the increased net value of the gas through converSiOn into urea.
4.5 Liquefied Natural Gas (L.N.G) 51 4.5.1 Uses and markets 4.5.2 Plant size and production process 4.5.3 Calculation of the increased net value of the gas through conversion into liquefied natural gas (L.N.G). 4.6 Power 55 4.6.1 Present condition 4.6.2 Calculation of the increased net value of the gas through conversion into power. 4.7 Liquefied Petroleum Gas ( L.P.G) 57 4.8 Carbon Black 57
(iv) TABLE OF CONTENTS (Contd.)
Chapter Page 4.9. Single Cell Protein (SCP) 58 4.10. Sponge Tron 58 4.11. Poly Vinyle Chloride (P.V.C) 59 5. FINDINGS OF THE STUDY 60 6. LIMITATIONS OF THE STUDY 86 7. CONCLUSION 89 8. RECOMMENDATIONS 95 REFERENCES
(v(
• • ,
LIST OF TABLES
No. Title Page
3.1 Reserves of natural Gas, condensate and crude 09 oil of Bangladesh.
3.2 Natura! Gas : reserves, chemical composition, 12 specific gravity and calorific value.
5.1 Arrangement and ranking of the products with 61 the increased net value of the gas in the decreasing order their markets (domestic/export) and commercial planned capacity.
5.2 World annual demand for methanol. 62
5.3 Forecast of annual world demand foc 64 methanol.
5.4 Annual demand of methanol foc the 65 replacement of diesel in Bangladesh
5.5 Annual demand of methanol foc the 66 replacement of kerosene in Bangladesh.
(vi) LIST OF TABLES (Contd.)
No. Title Page
5.6 Annual share of world demand for methanol by 68 Bangladesh for the replacement of diesel and kerosene.
5.7 Forecast of annual share of world demand for 69 methanol by Bangladesh for the replacement of diesel and kerosene.
5.8 Yearly demand of petrol in Bangladesh for the 72 transport sector.
5.9 Forecast ofyearly demand ofpetrol in Bangladesh 73 for the transport sector.
5.10 Annual consumption of natural gas 10 77 Bangladesh for power generation.
5.11 Forecast of annual consumption of natural gas in 52 Bangladesh for power generation.
5.12 Yearly demand of diesel in Bangladesh for the 78 transport sector.
5.13 Forecast ofyearly demand of diesel in Bangladesh 81 for the transport sector.
(vii)
. , LIST OF TABLES (Contd.)
No. Title Page
7.1 The growth of nee, tea, wheat, vegetable 83 production with increased sale of fertilizer (urea) from 1977-1978 to 1997-1998.
(viii) LIST OF FIGURES
No. Title Page 2.1 Blockdiagram ofthe complete procedure ofthe study. 6 3.1 Transmission and distribution mainlines in Titas 14 Franchise Area. 3.2 Transmission and distribution mainlines in Bakhrabad 16 Franchise Area. 3.3 Transmission and distribution mainlines in Jalalabad 18 Franchise Area. 3.4 Schematic line diagram of gas pipeline grid of 20 Bangladesh. 4.1: Lincdiagram ofproduction ofmethanol 23 4.2: Typicalfast ftllC.N.Grefueling station. 31 4.3 Typicalpetrol to eNG conversion schematic. 35 4.4 Schematic of a gas/diesel engine with pilot injection. 37 4.5 Linediagram of production of anhydrous ammonia. 43 4.6 Line diagram of production arurca. 48 4.7 Line Diagram of production of liquefied natural gas 52 (L.N.G). 5.1 Forecast of annual world demand for methanoL 63 5.2 Forecast of annual share of world demand for methanol 70 by Bangladesh for the replacement ofdiesel & kerosene. 5.3 Forecast ofyearly demand ofpetrol in Bangladesh for the 74 transport sector. 5.4 Forecast of annual consumption of natural gas 79 in Bangladesh for power generation. 5.5 Forecast ofyearly demand of diesel in Bangladesh for the 82 transport sector.
(ix) LIST OF ABBREVIATIONS
Abbreviations Meaning AB Ashuganj - Bakharabad BC Bakhrabad - Chittagong BD Bakhrabad - Demra BFA Bakhrabad Franchise Area BGFCL Bangladesh Gas Field Company Limited BGSL Bakhrabad Gas Systems Limited BOGMC Bangladesh Oil Gas and Mineral Corporation BPC Bangladesh Petroleum Corporation BPDB Bangladesh Power Development Board eNG Compressed Natural Gas GEV Gas Export Value GOB Government Of Bangladesh GTCL Gas Transmission Company Limited IANGV International Association for Natural Gas Vehicle IGU International Gas Union IDe International Oil Company IPP Independent Power Producer ISO International Standard Organization JFA Jalalabad Franchise Area JGTDSL Jalalabad Gas Transmission and Distribution Systems Limited LNG Liquefied Natural Gas PSC Production Sharing Contract RPGCL Rupantarita Prakritic Gas Company Limited SGFL Sylhet Gas Fields Limited TFA Titas Franchise Area TGTDCL Titas Gas Transmission and Distribution Company Limited.
(x)
, LIST OF ABBREVIATIONS
Unit and Conversion ," Abbreviations Meaning K 10' MM 10' Billion 10" Trillion 1012 Million 10'
I MT (Metric Ton) 2205 Lb I Kilogram 2.2 Lb 1 Kilometer 0.621 Mile 1 M' 35.315 SCF 1 Atm 14.7 Psi 1 usn 51TK $ USD BCF Billion Cubic Feet TCF Trillion Cubic Feet SCF Standard Cubic Feet MMSCFD Million Standard Cubic Feet Per Day. MMBTU Million British Thermal Unit MPa Mega PascaL GWH Giga Watt Hour KWH Kilo Watt Hour P, Product x, Units V, US $ / Unit ARM, Cost of auxiliary raw materials, US $/Unit DCi Plant depreciation cost. US $/ Unit INTi Interest on capital and other charges, US $/ Unit INVi Increased net value of the gas through conversion into a product, US $/Unit. FC,- Fixed costs associated with the gas transmission, US $/ Unit.
(xi) , ,,~_....•,'l~ d''lt:;r;'f:t.Ga.7£::-:, ~ "',. . vI J~ 1. BACKGROUNDOF THE STUDY: .;;; \. l:ltl.~.~?"::.~.?-)'" 1_" .• *'-'- ~_.--'~_ ,~ rvr~.+'i "'"\ Bangladesh has huge potential gas reserves. It had;_1.'5:-Z45S:'Trillion
Cubic Feet (TeF) of recoverable natural gas (15). But 4.25 TeF of gas has already been consumed cumulatively upto 2000. Bangladesh has now 11.49 reF of net recoverable gas. Natural gas is the main indigenous natural resource contributing to the national economy pnmarily through generation of electricity, the production of fertilizer and the source of heat for domestic and industrial needs. This will continue m the foreseeable future. Natural gas IS used 10 manufacturing industries for many purposes. It is used in the service sector like hotels, restaurants etc. The domestic use of natural gas is for cooking and for heating of the household. As the natural gas is our main natural resource, so the gas has to be utilized in such a way that maximum benefits can be achieved from it. The benefits may be financial, social and environmental.
62 products can be produced from the natural gas. These are, for example, eNG, LNG, Methanol, Carbon Black, LPG, SCP etc. Natural gas can further be used as agents for other production process like production of sponge iron. Hence these may be studied as alternative uses of natural gas of Bangladesh. Before any decision is taken to use gas for any of the above mentioned products or process the followingshould be taken into consideration.
1. There should be an ensured and economically viable market for the product or process. The market may be domestic or foreign.
2. To produce the product there should be at least one proven process which is economically viable. In the recent days there is proposal from outside the country to export gas. This may be viewed as an altemative use of the natural gas. But the govemment of Bangladesh has decided, after the fulfillment of the internal demand of natural gas for 20 years, its export may be considered. 2 SCOPE OF THE STUDY:
2.1 Objective:
• The objective of .this study is to mwamlze the benefits from the natural gas resources of Bangladesh.
• To examine the alternative uses of the natural gas to identify its best uses.
• To develop a method to bring the benefits of the alternatives uses of the natural gas to a common scale which is "increased nct v31ue of the gas (INVi)"through conveersion into different products and to comparer the financial benefits.
• To 1>erchdomestic and export market and the commercially proven process before selection of the above products for further considcration.
• To calculate the total production of the products by Bangladesh upto 2020 and gas required to produce the above products upto 2020.
• To check the available gas reserve after every step.
2.2 Methodology:
When the natural gas is transformed into a product, Pi through a process (chemical, mechanical or othenvise), value may be added to the gas. But the process demands certain expenditure" (fixed and variable 10 nature). These costs should also be incorporated in the economic analysis. Let one unit of the natural gas generates Xiunits of product P" which has an international market value of Vi$junit. Hence X,V;$ is the market value of one unit of natural gas, when converted into product P" Let, the cost involved in the production of one unit of P, keeping the economy of scale of production of Pt in view.
Cost of auxiliary raw materials, ARMi($l/unit.
Fixed costs associated with the gas transformation, FCi ($l/unit.
Plant depreciation cost, DCi ($}/unit.
Interest on capital and other charges, INTi($l/unit.
Let the increased net value of one unit of the natural gas by transforming it into product, P, be INV,.then.
lNV,= XiV;- (ARM;+FC;+DCi+INTi)X,
(i) The increased net value of the gas for all alternative uses of the gas is calculated.
(ii) International price that can be achieved through the export of the gas which is used as a bench mark for this study.
(iii) Those products which have higher increased net value of the gas than the gas export value, GEV \\'ill be considered here for further study.
(iv) The products with INVigreater than GEV will be arranged
in the decreasing order and the series is termed as Pl, PJ,
PJ ....P,.... Pn. Further study will be carried out in this order, i.e, PI first followedby P2,followedby PJ and so on.
(v) For any product P, the global annual demand DPiwill be calculated. The share of Bangladesh in global annual demand for Pj is calculated and is termed as BDp,. , (vi) If there is commercial proven process for Pi and if BDp,;:>: economy of scale, the product will be further studied.
(vii) The annual production of g by Bangladesh is estimated and is termed as EBPp" estimated Bangladesh annual production of P"
(viii) The total share of Pi by Bangladesh upto 2020 is estimated and is termed as TBD[~.
(ix) The total annual production of Piby Bangladesh upto 2020 is calculated and is termed as TEBPp,.
(x) Total gas required to produce TEBPp,is calculated which is TGRpi.
(xi) If available gas reserve for product Pi, AGR, ~ TGRpi, the consideration for the production of Piis positive.
If AGRi< TGRp"then P, will not be selected because of the shortage of gas reserve. The plant life is not considered here, because the plant life of 20 yrs coincides with 2020 or exceeds it.
(xii) The analysis is repeated for the next product, Pl+!.
AGR,= AGRi-TGRPi. i:= 0
i := i+1
Calculate the increased net value of the gas (INVi) for the ith product
N
I, INV for the calculated product i is less INVi for than the export the last N product? value.
y
Arrange the products with the increased net value of the gas greater than GEV in the decreasing order and the series is termed as P1, P2, P3, P, Pn.
i := i + 1
The global annual demand of P, is calculated and is termed as Op,. The annual share by Bangladesh in Op, is BOp,.
Figure 2.1: Methodology of the study in block diagram. The annual production of Pi by Bangladesh is estimatedwhich Is EBPp,_
Product (Pi) will not be further N considered.
y
Calculate the total share of P, by Bangladesh upto 2020, TBDp;.
The total production of Pi by Bangladesh upto 2020 is calculated which is TEBPPI.
TGRpl = Total gas required to produce TEBPpj.
P, is not selected because of shortage N of gas reserve
y
Product P, is selected.
AGR is calculated for the next product having the next highest INV. AGRj=AGR,-TGRp,.
Figure 2.1: Methodology of the study in block diagram. , 2.3 Assumptions of the methodology
The methodology presented above is based on the following assumptions.
1. International price of the natural gas and international price of the gas based products covered in this study are assumed to be constant upto 2020 .
2, Auxiliaryraw material costs are also taken to be fIxedupto 2020.
3. Though there will bc technological development in different processes of the discovery of the gas reserves, these are not quite understandably considered here.
4. The cost of different plants & equipment for the products covered in the study are depreciated following straight line depreciation method. 3. NATURAL GAS RESOURCES OF BANGLADESH 3.1 Different gas fields of Bangladesh: The recoverable proven reserve of natural gas in gas fields discovered so far is 15.7455 TCF. Out of total recoverable reserve about 4.25 TCF gas has already been consumed. Now the net recoverable reserve of natural gas is 11.49 TCF. The proven and probable reserves ofvarious discovered gas fields are shown in table in 3.1. (15) Table 3.1 : Reserves of natural gas, condensate and crude oil of BangladesJ::l.. - NATl'JU.1.GAS II" un) CONOE"IS,," n: (/n I\IMBBL Sl F"IJ, Y""of UIiP 0"","'"'" ~ lli,_ ~ ", iJ,,,."v<') ,-, Pnxld", 1~.t>I< 1_, ,-, "-.-, (J"l<2ffiJ) - ,. r,""O""~ - -~- Hakllroh' Bangladesh Gas Fields Company Limited (BGFCL)controls (12) gas fields: Begumganj, Narshingdi, Belabo, Feni, Habiganj, Kamta, Meghna, Titas, Shahbazpur, Saldanadi, Bibiyana, and Moulavibazar. International Oil Companies control 4 gas fields. The gas fields are Sangu, Semutang, Kutubdia and Jalalabad. The gas distribution area in the country has been divided into three franchise area which belong to three marketing companies under Petrobangla. These are : Titas Gas Transmission and Distribution Company Limited (TGTDCL), Bakhrabad Gas Systems Limited (BGSL) and Jalalabad Gas Transmission and Distribution Company Limited (JGTDCL).Recently a wing under Gas Transmission Co. Ltd. has been formed to transport and distribute gas in the western part of the country after construction of the Jamuna Bridge. Among the three marketing companies, TGTDCLis responsible for transmission and distribution of gas in the greater Dhaka (Dhaka, Gazipur, Narayanganj, Munsiganj, Narshingdi), greater Mymensing (Mymensing, Tangail, Jamalpur, Sherpur, Netrokona, Kishoreganj) and Brahmanbaria district. Bakhrabad Gas System Ltd. is distributing and marketing gas to the entire southeast part of the country lllcluding the port city Chittagong. The Bahkrabad Franchise Area consists of Chittagong, Comilla, Chandpur, Noakhali, Feni and '" Lakshmipur. Gas transmission and distribution in greater Sylhet district (Sylhet, Habiganj, Moulivibazar and Sunamganj) has been fallen under Jalalabad Gas Transmission and Distribution System Ltd. A model Production Sharing' Contract (PSC)was signed by the government with International Oil Companies (IOC)in early nineties. Five PSC's have been signed for eight blocks. Twogas fields one in the offshore and other in greater Sylhet region have been discovered. About 60 MMCFDgas is being produced by Cairn Energy/Shell Oil from Sangu Gas Fields (Offshore) and 100 MMCFDfrom Jalalabad Gas Fields by Occidental/UnocaL The remaining 15 blocks have been offered to prospective bidders in the second round bidding. The final award of Production Sharing Contracts are in negotiation process. 3.2 Gas compositions of various gas fields: Analysis of the gas produced from the major fields are listed m table 3.2. Bangladesh gas consists primarily of methane, with relatively small quantities of heavier hydrocarbons. It is also very low in nitrogen, sulfur and carbondioxide. Methane is always present in gaseous form, ethane (C2H6)occurin gaseous or liquid form depending on the pressure and temperature condition while pentanes (CsH12), hexanes (C6H14)andheptanes (C7HI6),ifpresent, are always liquids. When the natural gas contains substantial amounts of ethane and the higher paraffin homologous, these are usually extracted during production operations. The resultant "Natural Gas Liquids" (NOL)(isobutane, pentane, hexane etc) and "LiquefiedPetroleum Gas" (LPG), essentially propane and n-butane are of value either as separate products, or as an addition to crude oil production. Where the proportion of extractable liquid hydrocarbon components is very small (less than 0.1 GaljMCF of gas treated), the natural gas is termed as dry, non-associated natural gas. Most of the gas fields of Bangladesh contain dry, non-associated gas. The annual recovery of " LPG from different gas fields is 1952MT, Table 3.2 Natural gas reserves, chemical composition, specific gravity and calorific value (15) , G"F~ld Pro,,", '"', • • {"h,ml,,I,,,",~,~iH,,""f(;" (V",,,,., 1'''''",1 c,' --,- - -lTv) .- ~ , •• ,.. Ik - - - - - '"" - - --e= , -'\Ih" 1951 "" "" %oJ '"' "' '" 00' '" ,oo OJo '" 1000Jill , , I,h,".,l 19.'" '11.'1<1 19"" 1 14" '"I "" "" "'~,11 , 2 142 L)0'1 'I~ O • Rc~ervcfigures are provisional Source Production & MarketingDivision,Petrobangla,June, 2000 3.3 Natural gas network of Bangladesh : The gas transmission network was built with a view to supply gas to the bulk consumer like the power stations and the fertilizer factories. Subsequently the distribution network was developed for other consumers in the industrial, commercial and domestic sectors. The first 8" transmission pipeline was constructed from Horipur, Sylhct to Fenchuganj to supply gas to Fenchuganj Fertilizer Factory after the discovery ofgas field at Horipur in the late fifties.At the same time a transmission line of 4" was also laid from Tanagartila gas field to Chhutak for supplying gas to Chhatak Cement Factory. In the year 1967-68 the Titas - Narshingdi - Demra (Dhaka) 14" dia transmission line was built for supplying gas to the bulk consumers at Ashuganj, Ghorashal, Narshingdi and Siddirganj area. Based on the pipe line, Dhaka city and Narayanganj area were brought under gas distribution network. Gas pipeline for 50 - 150 Psig gas pressure consisting of 'A" through 12" was built in Dhaka at Narayanganj. Another transmission line of 16" dia from Titas to Narshingdi and 14" dia Narshingdi to Joydevpur were laid to supply gas to Ghorasha1, Narshingdi area and greater Dhaka area including Tangail, Manikganj, Savar and Aricha. In 1980 a 12" dia transmission pipe line was constructed from Habiganj Gas Field to Ashuganj for supplying gas to Zia Fertilizer Factory. A 8" dia transmission line was built from Habiganj Gas Field to Shahajibazar power station and this transmission network was extended upto Shamsharnagar to supply gas to tea gardens and other customers in Habiganj and Moulobibazar towns. , , '.' ,. •, , I I ,..j ',I'm;.-." -~-"~""I-..., ~-..--~,.....,..•..•.• • ••:->, Ownt.oo"" 00 •• • f._....., T,_Go; u.. '-"T_ .•.••.<:...u.. ""' ••••• _ •••••• 1••• c..•.r•••• ...;,.,-•.•• .- ". Figure 3.1: Transmission and distribution mainlines In Titas , Franchise Area (15) " After the emergence of Bakhrabad Gas Systems Limited in 1980, a 24" dia gas transmission line was constructed from Bakhrabad to Chittagong to distribute gas to various load centers in the entire south-east part of the country. A20" dia, 48 km long pipe line was laid from Bakhrabad to Demra along Dhaka-Chittagong highway to cater for the demand of gas in Dhaka City. The gas distribution network for Chittagong, Comilla, Chandpur, Feni, Majdee and Kaptai was built simultaneously at the same period. Twoimportant gas transmission network were built followingthe development of gas fields at Beanibazar, Kailastila, Rashidpur and Habiganj. One is 174km 24" dia North South pipeline from Kailastila to Ashuganj and the other is 124 km 24" dia line from Ashuganj to E1cnga(Tangail)for deliveringgas to greater Mymensing area including bulk consumers e.g. Fertilizer Factory at Sharishabari power plant in Mymenshing with a future provision for supplying gas to the western region of Bangladesh. The gas in the Chittagong region was supplied absolutely from the Bakhrabad Gas Field but after the dramatic decline of gas production from the field, the power plants, fertilizer factories, paper mill, refinery, steel mill and other industries in Chittagong region were facing suspension of production due to gas shortage. To overcome this situation a 30" dia 58 km long pipeline was constructed from Ashuganj to Bakhrabad for diverting surplus gas from the northern gas fields to the south east region. Subsequently transmission pipelines were also built from Meghna Gas Field to Bakhrabad and Salda Gas Field to Bakhrabad. To meet the increased demand of power in the country, several power plants under private participation are coming up. Among these .,. ,i >I '''-'''-' /', " N , '< ,~. , -, I , ,, - .~ / , , , ,, ,""" '" • r " , r I ',' ",[> I, ,,'"'" '''.,1J'" ""'H, '",",,' """,,,1,,, 11,,"" l""""l.", I'""", 'V.""]",,,_,. """.' H_.d"""",_, • II,""~,_" '",_,",'.,",'"l ,,~l " ,,,'"", ". t"" ,,,,",',,,',,",''', • r .,- ""1-'''' I "" '""r"'''' C." L",. <;" r",,, I '"" Figure 3.2 Transmission and distribution mainlines in Bakhrabad Franchise Area 1'6) " Horipur (near Sitalaykha river) and Megna Power Plant are worth mentioning. A 20" dia 65 km long lateral transmission pipeline was constructed from Monohardi (Narshingdi) to Siddirganj. The gas from this line willalso be diverted to Dhaka City. The supply of gas from the new wells of Titas, Habiganj, Rashidpur Gas Fields in year 2000 have raised gas flowto Ashuganj. Gas transmission line under IOC: Cairn Energy PLCjShell under Production Sharing Contract (PSC)has constructed 42 km 20" offshore pipeline to transmit gas to Bakhrabad - Chittagong 24" dia transmission line from Sangu Gas Field. 60 MMSCFDgas is available from this field to the National Gas Grid (1998). Occidental / Unocal of Bangladesh has also constructed 18 kIn 14" pipeline from Lakatura (JaJalabad Gas Field) to North - South Pipeline at Kailashtila. About 100 MMSCFD gas is being supplied to N-S pipe line. Unocal of USAhas proposed to the GOB for the development of Shahbazpur Gas Field at Bhola and construction of 174 km 24" transmission pipeline from Shahbazpur to Khulna via Bhola and Barisal under build, own and operate (BOO)basis. This will open an opportunity for industrialization of southern districts like Khulna, Barisal, Potuakhali which have the river communication with rest of the country and access to Mongla port. The proposal is under active consideration of GOB. Gas supply to northern area: Virtually the country is divided into two parts by the nver Jamuna. The gas network could not be extended due to this river. After completion of the bridge over the river Jamuna which has also [XISllNG TriANS~:ISSIOljlIN~ I HAl1SMISSIOrJ u:n, (PLAmIED! GAS fiELDS " , ~,' I------ fiigurc.:'1.3: Tn\llsmission and dislribution mainlines 111JalaJ[lbacl Franchise Area. (17) prOV1SlOnforthe gas line, the western part of the country is being brought under gas network. A significant work on gas network expansion has already been done. The construction of 24" dia pipeline from Elenga to Baghabari (30" dia pipe line along the bridge) is near completion. With the completion of this line the western districts like Sirajganj, Pabna, Bogra will be brought under gas distribution network, in the near future. The distribution network in Sirajganj district is under implementation. Thc main gas transmission and distribution main line in the country is shown in Figure-3.4. " /--I~~,.~ , --- ('! ~ .1 ,~ ,"..,. Hi, , o ,i ,[I . , ',/I',,,- - , ' ..i' ' Figure-3.4: Schematic line diagram of gas pipleline grid of Bangladesh. (15( 4. PRODUCTS FORM NATURAL GAS: Methane constitutes a minimum of 95% of the natural gas of Bangladesh, so the products produced from our natural gas must be methane based. The follO\vingproducts can easily be made from natural gas are Anhydrous ammonia, Urea, Methanol, Compressed natural gas (C.N.G),Liquefiednatural gas (L.N.G)etc. 4,1 Methanol (CH30HI : 4.1.1 Uses and markets: In USA methanol is used to produce the following chemical derivatives: Formaldehyde (30%of the methanol production). Aceticacid (lO°;',). Chloromethanes (10%). Methyl esters. Fibber precursors. Solvent. In industrialized areas, methanol is used as feed stock to produce other chemicals which are used to manufacture Adhesives Fibbers Plastics Solvents The potential export market: USA,Japan. (1) The potential local market. Replacement of kerosene and diesel in industry and power sector and house hold purpose, 4.1.2 Plant size and production process: The world market has several 2000 tons per day units m operation and this is the size that has been chosen for further examination. The process used is described in the following: Basic chemistry : Methanol is produced by the reaction of hydrogen and carbon dioxide at high temperature and moderate pressure in the presence of an copper based catalyst. Co 2H2 + CO =::.:::.t CH3 OH The hydrogen and carbon dioxide are produced by reforming natural gas to synthesis gas. Process description : The process plant consists of the following sections. Natural gas pretreatment Reforming Compression and synthesis Distillation Natural gas pretreatment: The design of the natural gas pretreatment section of the plant will vary depending upon the natural gas composition. Most natural gas plant designs include zinc oxide. • B~ner Natural G" I .Primary Auto pretreatment .I reforming reforming 9" Steam Recycle Purge Comprenian Methano "d Distillation synthesis Figure-4.l : Line diagram ofproduction ofmethanol and / or activated carbon beds to desulfunze the gas, preventing deactivation of the reformingcatalyst. Reforming: A portion of the treated natural gas is reformed with steam in a tubular fumace in the presence of a nickel based catalyst yields hydrogen and carbon oxide. These reactions are endothermic and proceed only partially to completion in the externally fired primary reformer. The extent of reaction is limited by equilibrium constraints. The remainder of the treated natural gas is mixed with oxygen and the partially reformed gas in the autothermal reformer. There the gas is further reformed over a nickel catalyst. The heat 115 supplied by the combustion of methane: N; CH4 + 02 ~C02 + 2H20 + Heat Thc addition of oxygen aliows the operators to maintain the correct ratio ofhydrogen to carbon dioxide. Compression and synthesis: The synthesis reaction takes place at a selected design pressure in the range of 50 to 100 Kg/Cm', depanding on plant size and factors affecting plant efficiency. Synthesis gas, consisting of hydrogen, carbon dioxide and about 4% incrts from the reformer, is compressed. The synthesis gas compressor is a steam-turbine driven centrifugal feedingthe inlet of the circulator. The circulator is also a steam turbine-driven centrifugal that circulates synthesis gas through the synthesis loop. Methanol is produced in a convertor in the presence of copper based catalyst. The reactions arc shown above. The temperature control in the reactor is by boiling water in one design and by adding cold gases to the bed in another. The inlet gas to the reactor is heated using reactor exit gas in a heat exchanger. Distillation: Crude methanol consists of methanol, water, dissolved gases and organic by products of the methanol synthesis. The impurites are removed from the methanol in trayed distillation column. The distillation system consists of two columns, the topping column and the refining column. The crude methanol is first passed to the topping column where the light ends are distilled overhead and are used as fuel in the primary reformer. Topped crude from the bottom of the topping column containing methanol, water and heavy ends is passed to the refining column where pure methanol is delivered overhead and condensed to methanol product. Synthesis gas and low pressure steam supply heat to the base of both distillation columns. 4.1.3Calculation of the "increased net value of the gas" through conversion into methanol. The data .of this analysis has been taken from (2) : Plant capacity (MTjDay) 2000 Annual production (KT/Yr) 594 Investment cost (MillionUS$) - 326 Variable cost except natural gas (US$/MT) 9.5 (Includes chemicals and catalysts, operating supplies, fuel, steam, power, condensate, instrument air, inert gas, refrigeration etc.) Fixed cost (US$/MT) 32 (Includes lahar, repairs and maintenance, miscellaneous spares and supplies, insurance and taxes etc.) Depreciation (US$jMT) 27 Interest and other charges (US$/MT) 7 Current selling price (US$/MT) 161 The cost of converting natural gas into I MT of methanol (9.5+32+27+7) (US$) = 75.5 US$ ------(Ia) Current price of 1 MTof methanol - 161 US$. ------(Ib) Heating value of methanol (5) BTU = 9760 LB ~ 21.51 MMBTU MT Heating value of 1MCF of Gas = 1MMBTU 21.51 MCFof gas produces same heat as 1 MTof methanol ----(Ic) Cost of converting natural gas into methanol= (Ia) .;-(Ic)= (75.5.;-21.51) = 3.51 (US$/MCF) ------(Id) Market value of natural gas after conversion into methanol = (Ib).;-(Ic)'" (161.•.21.51) = 7.48 (U8$/ MCF)------(Ie) The increased net value of the gas through conversion into methanol = (Ie)- (Id) ~ (7.48-3.51)= 3.97 (US$/MCF). --- (If) Comment: From the financial point of view it is logical to build a methanol plant in Bangladesh because the increased net value of the gas through conversion into methanol is 3.97 US$/MCF which is higher than the gas export value 2.50 U8$/MCF Methanol for the replacement of diesel: Heating value of diesel (6) BTU = 19,550 LB '" 43.10 MMBTU MT Heating value of methanol (5) '" 9760 BTU LB MMBTU =21.51 MT To produce 1 MMBTUof heat 0.0232 MTof diesel is required. To produce 1 MMBTUof heat 0.046 MTof methanol is required. 0.046 MTof methanol produces same heat as 0.0232 MTof diesel. 1.983 MTof methanol produces same heat as 1 MTof diesel.--- (Ig) The import price of 13,10,207MTofdieselis 275.14 MillionUS$ (4) The import price of diesel = 275.14xlO' US$/Ml' 13,10,207 = 210.00 US$/MT ------(Ih) So, the price equivalent of methanol replacing diesel in industry 210 U'>$ and power"" {Ih}-;.(Ig)= ------1.983 MT of Mel/wnol US> = 105.90 - (Ii) MT of Melhanol The market value of natural gas after conversion into methanol replacing diesel = (Ii)-;.(Ie)= 105.9/21.51 = 4.92 US$/MCF ---- (Ij) The increased net value of the gas through convertion into methanol replacing diesel = (Ij)~ (Id) = 4,92-3,51 = 1.41 US$/MCF. ------(lk) Comment: From the financial point of view it is not logical to produce methanol to replace diesel because the increased net value of the gas through conversion into methanol to replace diesel is only 1.41 US$/MCF which is less than the gas export value, GEV 2.50 US$/MCF. Methanol for the replacement of kerosene: Heating value of kerosene (8) BTU = 19,800 LB MMBTU = 43.7 MT MMBTU Heating value of methanol = 21.51 MT To produce 1 MMBTUof heat 0,023 MTof kerosene is required. To produce 1 MMBTUof heat 0,046 MTof methonal is required. 0.046 MT of methanol produces same heat as 0.023 MT of kerosene. 2 MTof methanol produces same heat as 1 MTof kerosene. ---- (ll) The import price of 2,68,245 MTof kerosene is 63.30 Million US$ (4) The import price of kerosene = 63.30xl0' US$/MT 2.68,245 US$ = 235.98 ------(1m) MT So, the price equivalent of methanol replacing kerosene for industry and power. 235.98 US'" = (1m) .;- (II) = ------2 AfT of Methanol us, = 118 ------(In) ""fT of Me/hanoi The market value of natural gas after conversion into methanol replacing kerosene = (In) .;-(Ie) = 118/21.51 = 5.49 US$ /MCF ---- (Io) The increased net value of the gas through conversion into methanol to replace kerosene'" (10)- (ld) = 5.49-3.51 = 1.98 US$/MCF. _ -- (Ip) Comment From the financial point of view it is not logical to produce methanol to replace kerosene because the increased net value of the gas through conversion into methanol to replace kerosene is only 1.97 US$/MCF which is less than the gas export value, GEV2.50 US$/MCF. 4.2 Compressed NaturalGas IC.N.G): 4.2.1 Uses and markets: CNG offers a method for using natural gas directly as an automotive fuel. CNGcan be used in the followingvehicles: (1) Petrol engines used in city based taxis. cars, buses etc. (2) Diesel engines used in trucks, buses, barges, ferries, locomotives. 4.2.2 Production process: The CNGrefueling station consists of the followingequipments. (1) Gas connection (2) Compressor (3) Storage cascade (4) Dispensing equipment Gas connection: There must be gas line with required pressure and flowcapacity adjacent to the refueling stations. If there is no gas line, arrangements for gas connection is to be made with the local gas company. The pipe size is to be calculated for the flow of gas to the refueling station and a separate gas meter is to be installed. Compressor: The compressor is a major item and sizes and cost options must be thoroughly investigated. Selecting an appropriately sized compressor at the start of CNGdevelopment program is difficult. A common approach is to select a compressor capacity that is Jaw for the long term' with the intention of purchasing a second unit as CNG vehicle numbers increase. The compression capacity depends on the gas inlet pressure with associated electric power. The compressor capacity increases with the increased gas inlet pressure. Higher compressor capacity will cost higher electric charges. A throughput ovcr a period of 12 hrs of 30 buses or 300 cars can be served by a compressor with an output of 300 Nm3jhr. o0000 )/)-0 ., o ~,' 1 () I -0 -'- ~i o •Yi \-"1-o 0g', ~; o o o {xI--Oo 0000 0") -08 o \ (0 Figure-4.2 :Typical fast fill C.N.G. refuelling station. " Storage cascade: In fast fillprocess banks of high pressure storage vessels are used to store gas in order to provide a buffer for peak refueling times. For vehicles fueled to a maximum pressure of 3000 PSI a storage pressure of 3600 PSI (25MPa)is used. The size of storage vessels is generally specified in terms of their water capacity in liters. Since a thermodynamic loss results from feeding high pressure gas into vehIcle cylinders when they are at low pressure, it is usually to divide the storage into cascades at several pressure levels, typically three. A control system ensures that the compressor refills the cascade preferentially, beginning with thc highest pressure storage vessels and moving in sequence down through the cascades until all ~et pressures levels are reached. The principal storage systems in use consists either of large horizontally mounted pressure vessels usually with a capacity of 1000 liters or group of smaller 50 liter cylinders mounted in buskets of 20 connected up in cascade (stephenson, 1991). Dispensing equipment: A CNG dispenser performs the same function as a liquid fuel dispenser, with the flowmeter measurement either volume or mass flow. A control system provides switching sequence the cascades correctly through the pressure range required during a refueling operation. Both single and two point out lets are in use. Most dispensers take from 5 to 8 minutes to fill a vehicle, very high flow dispenser (6000 m3/hr) are available for the refueling of buses and trucks. Vehicle technology : Both spark ignition (otto engine) and diesel engines can be converted to use CNGas fuel. These different engines require different technologies. Natural gas can be used for vehicle fuel in a number of ways. Conversion of vehicles to bifuel operation. Conversion of diesel engines: Dual fuel operation. Single fuel dedicated vehicle conversion. Since no dedicated natural gas engines (Original equipment manufactures) are yet available, retrofitting is required to allow the use of natural gas as a fuel. This involves the installation of some equipment in the existing engine. Conversion of vehicles to refuel operation: Refuel conversion is made in spark ignition petrol engines which can run either on petrol or CNG. The spark ignition engine uses a highly volatile fuel which turns to vapor easily such as gasoline. The fuel is mixed with air before it enters thc cylinders and is compressed by piston. An electric spark produced by the ignition system sets fire to or ignites the compressed air fuel mixture. The flame then progresses from the spark plug to the boundaries of the combustion chamber until the combustion process stops. During the subsequent cxpanslon process, work is transferred via the shaft of the engine to the load. The natural gas with 130 equivalent octane rating is used in an otto engine in bifuel operation without significant changes to the structures of the engines. The retrofit natural gas vehicle conversion consists of the followingcomponents: Air fuel mixture or gas carburetor Pressure regulator eNG storage cylinder High pressure components Fuel switching device eNG storage cylinder: High pressure storage cylinders, with high pressure gas line to engine bay and refueling point is installed. The cylinder is mounted on the vehicle with speciany made brackets and reinforcing plates designed to support eight times the weight of a cyhnder in any direction. A pressure relief is fitted and vented. The cylinder is also fitted with a quick acting safety shut -offvalve. Pressure regulator: A pressure regulator is installed in engine bay and connected to gas, engine cooling water, electrical services. The regulator is a self contained, multiple staged regulator. The regulator reduces the pressure from the storage pressure in cylinder (3000 PSi) to atmospheric in two or three stages. It is mounted in a protected position, shielded from heat sources, in such orientation that any moving parts are not affected by vehicle acceleration (stephenson, 1990). As high pressure gas expands to atmospheric pressure it is cooled. To prevent refrigeration effects on the reduction unit, hot engme coolant is circulated around the high pressure casmg. Temperature is controlled by an integrated thermostat. Air fuel mixture/gas carburetor: There are basically two designs of gas carburetor, the constant depression type and the fixed venturi type. The former maintains a constant section across a variable area venturi, the flowof gas being regulated by a tapered plug moving in a jet. In later type the suction generated at the venture draws gas from the regulator, the theory of operation is that both the suction from the engine air flow and the pressure drop in the gas line arc proportional to the square root ofair "-i ~5 " ii ,I ? , , QQ ,,,/, " ' ,, '-"' -' , , ,, ,, ,,,, ,,,, , , ,, ,, ,,,, [L___:' ~~@ Iii13 '" l______~! ' c .. ,~ ,j iIX1 13 ~ 'l':,d ~~i r---I ---, ul i 7 i I!"~bI i ~ ~ ~ ~ '•..._------' I Figure -4.3: Typical Petrol to C.N.G. conversion schematic. flow and the gas flow respectively (stephenson, 1990). When adjusted at anyone running condition the flows remain in proportion as the condition the flows remain in proportion as the engine demands more or less air and gas (IGVjIANGVTask Force Report, 1994). The mixture has no movingparts and is an actual metering device for gaseous fuel. The air fuel mixture assembly is installed with a minimum of modifications and uses the vehicles original air breather assembly and original air filter. High pressure components: All components that carry high pressure eNG from the cylinder to the pressure regulator are stainless steel tube rated at least 4 times operating pressure. Tubing is supported and secured to the vehicle by insulated metal straps. The remammg installation work involves filting the change over switch (from petrol to CNG and vice versa) and the solenoid (electrical) valve which select either petrol or CNG or other miscellaneous equipment such as a fuel level indicator. Conversion of diesel engines: Dual fuel operation: The dual fuel approach to operating a diesel engine on eNG uses a pilot amount of diesel to initiate combustion in a gas air mixture in the engine. In the diesel engine, the fuel (diesel)is mixed with air after the air enters the engine cylinder. The system is also called compression ignition. Air alone is taken into the cylinders of the diesel engine. The air is compressed so much that when diesel- a light oil is injected into the engine cylinder, the hot air or the heat of compression ignites the fuel. So in diesel engine, the fuel will automatically ignite when injected into hot air. (=\ ! I I I , , 'II, , l , i i ,~ ! , , " l , I I l ,g , , ,! " " , I , , i ," l , , ~ ...... ,. '- o o Figurc-4.4: Schematic of a gas/diesel engine with pilot injection. The willingness to ignite is generally expressed in the cetane number. The cetane number of the gaseous fuels, except hydrogen, is so low that they are not suitable as single fuel (Nevesey, 1994). For diesel vehicle to run on CNG, a pilot amount of diesel is required for initiating the combustion. In dual fuel operation, the mixture to the engine is metered by a gas carburetor or gas injection system. Some means of controlling the diesel fuel injection to pilot levels is also used. A schematic of dual fuel engine is shown in Figure (4.4). The cquipments needed for conversion are: Gas cylinder Gas regulator Feeding device (gas mixer) that feeds gas into engine aIr intake duct Diesel/gas control system Cut off solenoid valve The pressure of CNG stored III the gas cylinder is reduced to atmospheric and fed to a gas mixer in the air induction manifold. The control system metering the gas also controls the level of diesel 110w. The energy supplied by the gas can range from upto 90% (stephenson, 1990). The main advantage of the dual fuel system is that the driver can revert to diesel operation when necessary. 4.2.3 Calculation of the "increased net value of the gas" through conversion into compressed natural gas (CNGl: CNGfor the replacement of diesel: Heating value of diesel'" 19550 BTU/LB (6) ..,43.10 MMBTU MT Heating value of 1 MCF of CNG = 1 MMBTU 43.10 MCF of CNG produces same heat as IMT of diesel. --- (lIa) The import price of 9,31,044 MT of diesel for road, rail and nver transport = 195.516 Million US$ (4). The Import. pnce . a rd. lese 1 ..,----195.516xl0' US$/MT 9,31,044 = 209.99 US$IMT ------(I1b) So the price equivalent of CNG replacing diesel.., (lib) + {IIa) 20999 . o --US$IMCF'" 4.87 US$IMCF of CNG ----- (Hc) 43.10 Investment cost of C.N.G. filling station'" 1,50,00000 Tk. = 0.294 Million US$. (14) To produce 1.05 NM3ofCNG, the following costs are involved (14) Cost of utility services (TK/Nm3)- 1.05 Wastage 5'\10 on utility (TK/NmJ)- 0.052 Depreciation on machinery (TK/Nm3)- 1.137 Interest on cost of machinery (TK/Nm3)- 1.46 Overhead cost (TK/Nm3) -0.62 Cost of converting natural gas into 1.05 Nm.1or 0.03708 MCF of CNG = 4.319 TK. Cost of converting natural gas into IMCF of CNG = 4.319/0.03708 TK/MCF = 116.4778 TK/MCF = 116.4778/51 (US$/MCF) = 2.2838 (US$/MCF) ------(TId) The increased net value of the gas through conversion into CNG to replace diesel = (lIe)- (lId) = (4.87 - 2.2838) (US$/MCF) = 2.586 US$/MCF ------(lIe) Comment: It is logical to use CNG as fuel to replace diesel because the increased net value of the gas through conversion into CNG to replace diesel is 2.586 US$/MCF which is higher than the gas export value 2.50 US$/MCF. eNG for the replacement of petrol: BTU Heating value of petrol = 20,500 LB (81 = 45.2 MMRTU MT Heating value of 1 MCF of CNG = I MMBTU 45.2 MCF of CNG produces same heat as 1MTof petrol. ----- (IIf) The import price of J ,07,967 MT of petrol for road transport = 26.83 Million US$. (4) .. f I 26.8JxlO" S$/MT Th CImport pnce 0 petro = U 1,07,967 = 248.50 US$jMT ------(IIg) So, the pnce equivalent of eNG replacing petrol 248.50/45.2 USS(MCF. = (JIg).;. (IIt) = 5.498 US$jMCF of eNG. ----- (IIh) The increased net value of the gas through conversion into eNG to replace petrol = (I1h)- (lId) = (5.498 - 2.2838) (US$jMCF) = 3.2142 US$jMCF. ----- (Ili) Comment: It is logical to use eNG as fuel to replace petrol because the increased net value of the gas through conversion into eNG to replace petrol is 3,2142 US$ / MCF which is higher than the gas export value 2.50 US$jMCF. 4.3 Anhydrous Ammonia 4.3.1 Uses and markets: In the highly industrialized regions 20% or more of the total production of ammonia are used as fibbers, plastics, explosives and other chemicals : The remainder are used into fertilizer applications, either direct as anhydrous ammonia or through derivatives such as uren, nmmonium nitrate and ammonium phosphates. In less developed areas 90% or more of total production are used as a source of nitrogen based fertilizer. The potential export market : USA, Western Europe, Japan India. (1) 4.3.2 Plant size and productionprocess: If Bangladesh plans to acquire an anhydrous ammoma plant, the process with plant should be well proven in a developing country context. An unit of 1000 MT per day having been well known and excellent record, can be a, logicaland rational choice. The process used for such a plant is described on the following: Basic chemistry : Amrnonia is produced by the reaction of nitrogen and hydrogen at high pressure and temperature in the presence of an iron based catalyst. F, N2+ 3H2~ 2NH3 + Heat. The hydrogen is produced by reforming of natural gas. Nitrogen is added as air to the secondary reformer. The process plant consists of the followingsections: Natural gas pretreatment Primary reforming Secondary reforming Synthesis gas purification Compression and synthesis. Natural gas pretreatment: The design of the natural gas pretreatment section of the plant will vary depending upon the natural gas composition. Most natural gas plant designs include zinc oxide Primary Secondary reformer reformer Compressio nand I •• •• synthesis Ammonia Carbon Recycle dioxide Purge stream stream (Inert gas) Figure-4.5 : Line diagram of production of NH3 and/or activated carbon beds to desulfurize the gas, preventing deactivation of the reforming catalyst. Primary reforming: Primary reforming of the treated natural gas with steam in a tubular furnace in the presence of nickel based catalyst yields hydrogen and carbondioxide. Ni CH4 + 2H20 + Heat •• C02 + 4H2 Ni These reactions are endothermic and proceed only partially to completion in the externally fired primary reformer. The extent of reaction is limited by exilibrium constraints, Secondary reforming: Secondary reforming with air addition over a nickel based catalyst increases the temperature and provides heat to reduce the methane to appproximately 0.4% by completing the above reactions using heat from the air oxidation. Ni CH4+ 0;> ~C02 + 2H20 + Heat Synthesis gas purification: Carbon monoxide produced m the reforming process 1S converted to carbon dioxide in the presence of an iron based catalyst to produce additional hydrogen. F, CO + 02 ~ C02 + H2+ Heat The carbon dioxide is then recovered form the synthesis gas by means of an absorption system. The absorbent is regenerated with process heat and stcam in a stripping column and recycled to the absorber for use ll1 other processes such as urea synthesis or methanol manufacture. Residual carbondioxides in the synthesis gas are converted to methane by reacting with hydrogen in the presence of a nickel based catalyst. Ni --"-CH4 + 2H;>O+ Heat Compression and synthesis: The purified synthesis gas consists of hydrogen/nitrogen in the molecule or ratio of 3/1 with approximately 1.3% methane and argon as inerls. The synthesis gas is compressed to a high pressure, mixed with recycle gases and refrigerated to condense ammonia and remove residual impurities such as oil, water, any remaining carbon dioxides. After seperating the product liquid ammonia, the synthesis gas is delivered into the convertcr where ammonia is produccd in the presence of an iron based catalyst. F, N2 + 3H2 •• 2NH3 + Heat. Converted gas leaving the ammonia converter IS cooled and the condensed ammonia is separated before it is mixed with fresh synthesis gas and the cycle is repcated. Inert gases in the recycle stream are controlled by a continuous purge from the synthesis loop which i-sused as fuel in the primary reformer furnace. 4.3.3Calculation of the "increased net value of the gas"through conversion into anhydrous ammonia: The data of this analysis has been taken from (2): Plant capacity (MT/Day) 1000 Annual production (KT/Yr) 297 Investment cost (MillionUS$) 288 Variable cost except natural gas (US$/MT) 24.49 (Includes chemicals and catalysts, carbon dioxide, fuel, steam, power condensate, inert gas, refrigeration etc.) Fixed cost (US$/MT) 55 (Includes Jabor, repairs and maintenance, miscellaneous spares and supplies, insurance and taxes etc.) Depreciation (US$jMT) 49 Interest and other charges (U8$jMT) 9 Current selling price (US$jMT) 155 (22) The CO~tofconverting natural gas into 1 MT of anhydrous ammonia = (24.49+55+49+9) (U8$) = 137.49 US$ ------__(IlIa) Current price of 1 MTof anhydrous ammonia = 155 U8$. (22) --.------(lIlb) Average' Amount of gas required to produce 1 MT of anhydrous ammonia 16.51 MCF. ------(IIIc) The cost of converting natural gas into anhydrous ammonia = (llla)~. (lIIc)= (137.49+16.5l) = 8.33 US$jMCF (IUd) Market value of the natural gas after Conversion into anhydrous ammonia = (IIIb)+ (IIIc)'" (155+16.51) = 9.39 US$jMCF. (IIIe) The increased net value of the gas through conversion into anhydrous ammonia'" (lJIe)-(IIId)= 9.39-8.32 = 1.06 US$jMCF. ------(I1Ii) Comment : The increased net value of the natural gas through converSIOninto anhydrous ammonia is 1.06 U8$jMCF which is less than gas export value, 2.50 US$jMCF. As the international price of ammonia fluctuates in wide ranges so from this current calculation it can not be concluded whether ammonia plant can be built or not. If the ammonia price improves in future the increased net value of the gas through conversion into NH3will also be increased. Ammonia is used in refrigeration as working fluid and its compounds (NH4)2S04, (NH4) NO.3,DAP are used as fertilizer. It can be used directly as fertilizer or as main raw material to produce urea. Many NH3and urea plants are now in production in Bangladesh. Urea increases the self sufficiency in food production. So beforc taking any decision to build an NH.l plant, all the above factors have to be considered. 4.4 Ur~a: 4.4.1 Uses and markets: • In heavily industrialized arcas, 90% of the total production are used as fertilizer. • 10% of the total production are used to produce formaldehyde and melamine resins. • In stock raising areas cattle feed may take 10°;{, of urea. • In Bangladesh all urea is used as fertilizer. • The material is a prime source of nitrogen based fertilizer and is favored ergonomically over other simple sources such as ammonium nitrate. The potential export market USA,Western Europe, Republic of China, Japan, India. (1) But the total demand in Bangladesh is more than the present production capacity. For that reason Bangladcsh has to import urea. 4.4.2 Plant size and production process: Units have become standardized to match the standard ammonia plant size, so that world wide there are hundreds of complexes with a capacity of 1000 ton per day ammonia! 1725 ton per day urea. The process for such an urea plant is described in the following: Basic chemistry: Ammonia and carbon-dioxide are reacted at hlgh pressure to yield urea and water. The basic reaction can be written as 2NH3+ C02 -7 NH2CO NH2+ H20 Urea The process plant consists of the followingsections: Synthesis Decomposition Concentration Finishing Synthesis : Ammonia and carbon dioxide are reacted at high pressure to yield urea and water. The carbamate formation reaction is as follows: CO-.+ 2NH3-7 NH2COONH4+ Heat Carbamate Carbamate rich streams from the decomposition section of the plant are recycled to the reactor. Ammonia I Reactor Oecom :1 position I • Carbondioxide Evaporation "I Finishing • Urea product Figure - 4.6 : Line diagram of production of urea Decomposition: The product stream leaving the reactor is sent through staged high, medium, low pressure decomposers. The reaction for thc decomposition of ammonium carbamate can be written as NH2COONH4+ Heat -~ 2NH3+ C02 Carbamate Overhead streams of the decomposers containing NH3,C02 and water are condensed and recycled-back to the reactor. The product stream leaving the decomposers contains approximately 70'X, urea solution. Concentration : The product stream leaving the low pressure decomposer contains the water formed as a result of urea production. The stream is fed to evaporators where the urea is concentrated. Evaporator overhead is processed to recover unreacted ammonia and carbon dioxide. Finishing : The two basic finishing designs are prilling and granulation of the concentrated urea solution. The granulated product is harder and able to \vithstand degradation during shipping. Various additives are available to improve the quality of the final product. 4.4.3 Calculation of the "increased net value of the gas" through conversion into urea: The data of this analysis has been taken from (2): Plant capacity (MT/Day) 1725 Annual production (KTIYr) 512 Investment cost (MillionUS$) 509 Variable cost except natural gas (US$/MT) 26.39 (Includes chemicals and catalysts, ammonia, carbon dioxide, operating supplies, fuel, steam, power, condensate, inert gas, refrigeration etc.) Fixed cost (US$/MT) 57 (Includes labor, repairs and maintenance, miscellaneous spares and supplies, insurance and taxes etc.) Depreciation (US$/MT) 50 Interest and other charges (US$/ MT) 9 Current selling price (US$/MT) 125 (22( The cost of converting natural gas into 1 MTof urea (26.39+57+50+9) (US$)= 142.39 US$ ------(IVa) CUTrentprice of 1 MTof urea = 125 US$. (22) ------(IVb( Average amount of gas required to produce 1 MTof urea 9.61 MCF. ------(IVc) The cost of converting natural gas into urea = (IVa).;.(IVc) (142.39.;.9.61) = 14.82 US$ /MCF ------(IVd) Market value of the natural gas after conversion into urea = (IVb).;. (IVc)= (125.;.9.61)= 13 US$ / MCF---- (IVe) The increased net value of the gas through conversion into urea = (IVe) - (IVd)= (13-14.82) = -1.82 US$/MCF. ------(IV!) Comment: From the financial point of view it is not logical to build an urea plant because the increased net value of the gas through conversion into urea is only -1.82 US$/MCF. It can not ,be the only critcria to build an urea plant. But at present in Bangladesh many urea plants are now in production. From the past record it is seen that the application of urea increased production of food such as rice, wheat, tea, vegetables etc. Bangladesh has always been a food deficit area. But it has recently achieved food sufficiency, there by saving huge amount of foreign exchange to import food grains. It increases the employment in urea plant and agricultural sector. However, the chain effect of urea on economy is not within the scope of this study. '" 4.5 Liquefied NaturalGas (LNG): 4.5.1 Uses and markets: LNGoffers Bangladesh a means for export of natural gas directly in a form already familiar in international markets. There is also some potential for local use in Bangladesh as a replacement for other types of automotive fuel. The potential export market: Japan, Republic of Korea, Taiwan etc. 4.5.2 Plant size and production process: A world scale single train of liquefaction has a capacity of about 4000 tons per day. It is suggested that consideration of a liquefaction unit be limited initially to about this size, which could be multiplied later if desirable, by addition of further units. The process involvedis described in the following. Basic chemistry: LNG is produced by removing sufficient heat to reach the liquefying temperature of the natural gas. _160°C Natural gas - Heat ••LNG. Process description: There are three elements III the manufacture of liquefied natural gas Acidgas removal Dehydration Liquefaction and fractionation. Acid gas removal: An acid gas removal unit IS used to remove carbon dioxide and sulpher compounds from the gas to be liquefied. This is necessary to prevent freezing of carbon dioxide in the liquefaction section and avoid equipment corrosIOn and product contamination. Natural I Acid gas Liquefaction Liquefie d 1 removal Dehydration ,"d g" fractionation Natural g" product Figure - 4.7 : Line diagram of production of LNG Dehydration: A dehydration unit is used to remove water from the gas thus preventing freezeup problems in the liquefaction section. The gas leaves the acid gas removal unit saturated with water. In the dehydration unit it is cooled in a controlled manner to avoid hydrate formation. The condensed water is separated from the natural gas which then enters molecular sieve dryers where the water content is reduced to less than one part per million. Dust and desiccant particles, which could plug the downstream exchangers, are removed by passing the gas through cartridge filters installed downstream of each drier. Liquefaction and fractionation: Before the filtered, dried natural gas can be liquefied, a number of hydrocarbon constituents must be removed as they may freeze out during liquefaction. Thus the natural gas is first precooled by heat exchanger with a conventional propane refrigerant system. The condensed heavy liquid hydrocarbons are separated and sent to the fractionation unit for separation into refrigerant make up components of ethane, propane and butane and into gasoline. The remaining lean natural gas is then liquefied and subcooled 10 a cryogeniC heat exchanger. The refrigeration in this unit is produced by circulation of refrigerant in a closed loop. The refrigeration media is a mixture of light hydrocarbons extracted from the natural gas and nitrogen produced in an air separation plant. The subcoo1cd LNG is then flashed off to reduce the nitrogen content, thus meeting product specifications and is pumped to the storage tanks where it is kept at a pressure close to atmosphere. From the storage tanks, the LNGwill be loaded into tankers for transport to LNG receiving terminals, where it will be regasfied and sent to pipe lines. 4.5.3 Calculation of the"increased net value of the gas" through conversion into liquefied natural gas (L.N.G). The data of this analysis has been taken from (2) , Plant capacity (MTIDay) 4000 Annual production (KTIYr) 1188 Investment cost (MillionUS$) 812 Cost per MTof product IUS$/MT) Variable cost except natural gas (US$/MT) 9.92 (Includes chemicals. carbon dioxide, operating supplies, fucl, steam, power, condensate, inert gas, refrigeration etc.) Fixed cost (US$/MT) 34 (Includes labor, repairs and maintenance, miscellaneous spares and supplies, insurance and taxes etc.) Depreciation (US$/MT) 34 Interest and other charges (US$/MT) 10 Current selling priee (US$/MT) 220 The cost of converting natural gas into 1 MT of L.N.G - (9.92+34+34+10) (US$/MT) = 87.92 US$ ------(Va) Current price of 1 MTof L.N.G" 220 US$ ------(Vb) BTU Heating value of 1 MTofL.N.G = 24,855 L8 (6) .• 54.81 MMRTU MT Heating value of 1MCFof gas" 1 MMBTU 54.81 MCF of gas produces 54.81 MMBTU 54.81 MCF of gas has same heat as 1 MTof L.N.G. ------(Vc) Cost of converting natural gas into of L.N.G = (Va}7(Vc)"(87.92754.81) = 1.6041 US$/MCF ------(Vd) Market value of natural gas after conversion into L.N.G. = (Vb)7(VC)= (220~54.81)=4.014 US$/MCF ------(Ve) The increased net value of the gas through conversion into L.N.G = (Ve)- (Vd)= (4.014-1.6041)=2.4099 US$/MCF ------(Vi) Comment: From the financial point of view it is not logical to build L.N.G plant because the increased net value of the gas through conversion into L.N.G is 2.4099 which is less than the gas export value.If Bangladesh can discover adequate gas reserves in future it can produce L.N.G.This type of large plant can create opportunity for employment generation in Bangladesh. 4.6 Power: 4.6.1Present condition: During the year (1998-99) 13060.28 GWH of net energy was generated in the public sector power plants under BPDB. In addition to the above about 578.22 GWHof electricity was purchased by BPDS from IPP (Independent Power Producer) in the private sector. As a result, the net energy generation by public and private sector power plants stood at 13638.50 GWH,which was about 11.84% higher than the previous years net generation of 12194.18 GWH in the public sector. The net energy generated by the public and private sector power plants by type of fuel were as follows. Hydro - 828.88 GWH(6.08%) Natural gas - 11495.82 GWH(84.29%) Furnace oil - 685.52 GWH(5.03%) Diesel - 628.18 GWH(4.60%) Total - 13638.50 GWH The overall thermal efficiency of the generators in the public sector (FY-1998-99)was 31.63% compared to 31.59% in the previous yeClr. Among 17 power stations in Bangladesh, Ashuganj, Ghorasal, Sahajibazar, Sylhet, Chittagong Power Station (210MW),Shiddirganj, Shikalbaha Power Stations use natural gas as fuel. The remaining other power stations use High Speed Diesel, SKO, Fumaee Oil etc as fuel. The use of natural gas in power generation is increasing gradually. During the 1998-99 the gas consumption by BPDB was 136802 MMSCF(6,287,408,567 Tk). The liquid fuel consumption was Fumaee Oil - 11.692 million gallons, Diesel and Kerosene-53.916 million gallons (3,379,177,254 Tk). (20) 4.6.2 Calculation of the "increased net value of the gas" through conversion into power: The data of this economic analysis has been taken from (19) Plant capacity ~ 60 MW Annual production = 35,82,34,454 KWH Investment cost (MillionUS $) = 74.1730 Cost of natural gas (Tk/KWH)= 0.7568 Repair and maintenance expenses (Tk/KWH) = 0.05245 Personnel expenses (Tk/KWH)~ 0.09337 Office and other expenses (Tk/KWH)~ 0.02108 Lubricant expenses (Tk/KWH) = 0.001758 Depreciation (Tk/KWH) = 0.58628 Interest (Tk/KWH) = 0.2250 Insurance (Tk/KWH) = 0.001321 Current selling price (Tk/KWH)~ 2.71 Cost of converting natural gas into 1 KWH power = (0.05245+0.09337+0.02108+0.00 1758+0.58628+0.2250+0.00 1321) TK. = 0.98126 TK. ------(VIa) Current price of 1 KWHof power ~ 2.71 Tk. ------(Vlb) Average amount of gas required to produce I KWH of power = 12.34 SCF ------(VIc) Cost of converting natural gas into power = (VIa) + (VIc) = 0.98126.;. 12.34 = 0.07952 Tk/SCF ------(Vld) Market value of natural gas after conversion into power = (Vlb) .;-{Vic)= 2.71.;. 12.34 = 0.21961 Tk/SCF------(Vie) The inreased net value of the gas through conversion into power = (Vie)- (Vld)= 0.21961- 0.07952 = 0.14009 Tk/SCF = {(0.14009x 1000).;. 51}US$/MCF = 2.745 US$/MCF ------(Vlf) Comment : From the financial point of view, it IS logical to build power station because the increased net value of the natural gas through conversion into power is 2.745 US$/MCF which is greater than the gas export value. As the system loss of PDB is very high (During 1998-99 the system loss was 16_76n;[]ofnet generation which was 16.55% during financial year 1997-98.), so it can not collect necessary revenue. If the system loss of POB improves, the increased net value of the gas through conversion into power will further be increased. 4.7 Liquefied Petroleum Gas (L.P.G) : Liquefied Petroleum Gas(LPG)can be produced from natural gas. LPGconstitutes propane and butane portion of the natural gas. As the natural gas of Bangladesh is dry, non associated gas and the annual recovery of LPG from different gas fields is only 1952 MTwhich is very small amount. So LPGis not considered in our study. 4.8 CarbonBlack: Approximately 95% of the total world production of carbon black is made by the furnace partial combustion method using heavy liquid aromatic hydrocarbons as feedstock. The remaining 5% is produced by the thermal decomposition of natural gas. Carbon black produced from liquid hydrocarbons, a higher quality product, preferred by the rubber industry. Carhon black produced by the thermal decomposition of natural gas has inferior properties when used in processing rubber products. Since the overwhelming majority of world market consumption of carbon black 1S in elastomer treatment, carbon black pToduced by the thermal decomposition of natural gas is not competitive on a world wide basis. So carbon black has not been further studied in this study. 4,9 Single Cell Protein IS.C.PI: SCP for usc as an animal feed supplement would be an ideal product to produce in Bangladesh, as it is based on methanol produced from natural gas. This synthetic source of high protein content competes directly with naturally produced soybean meal which serves the SaIlle purpose.The comparison of current market price of soybean meal with minimum selling price of SCP is given below. Methanol at US$106fTon % crude US$ per protein (CP) toe sep 72 643 Soybean meal 44 200 Methanol at US$ 167fTon % crude US$ per protein (CP) to, sep 72 757 Soybean meal 44 200 II is clear that SCP made under the current conditions assumed for in Bangladesh cannot possibly compete with locally imported soybean meal. So SCPhas not been further considered in this study. 4.10 Sponge Iron: There is a potential demand in Bangladesh for quantities of scrap approaching 400,000 tons per year, much of which could ue supplied by locally produced sponge iron fTom imported iron ore pellets. As the production process requires sub raw product at a large volume so this product is not considered in our study. 4.11 Poly Vinyle Chloride (PVC I: PVC can be produced from imported VCM (Vinyle Chloride Monomer). Imported VCM is very costly product. PVCcan also be produced from accetylene (C2H2)from natural gas and hydrogen chloride (HCl).The production process IS very costly. So PVChas not been further considered in this study. 5. FINDINGS OF THE STUDY: The increased net value of the gas for the different products has been calculated in the past chapter- (4). The products are ranked with the increased net value of the gas in the decreasing order. The products with higher increased net value of the gas than the gas export value, GEV are arranged in the decreasing order. The series is termed as Pl, P2, P3 ------P". Then the market (domestic I export) and commercial planned capacity for the products are searched. From equations (If)(Ik)(Ip)(I1e)(IIi)(IIIf)(IVf)(Vf)(Vlf)it is shown that Table 5.1 : Arrangement and ranking of the products with the increased net vaJue of the gas in the decreasing order and their markets (domestic/export) and commerciaJ planned capacity. ~--~ Products "Inecrased Ranking of the Gas Export Products with Market Commercial net value of products with Value, higher "increased planned the gas~ the "increased USD/MCF net value of the capacity for USD/MCF net value of gas" than GEVin INVi the gas~ in the the decreasing calculation decreasing order. The series is order termed as (PI-P~). CNGto 2.586 IV e, Domestic 7000 Nm3/Day replace diesel CNGto 3.2142 II e, Domestic 7000 Nm3/Dav replace petrol Methanol 3.97 I 2.50 e, Domestic/ 2000 MT/Day Export Methanol to 1.41 VII Domestic replace diesel Methanol to 1.98 VI Domestic replace kerosene Anhydrous 1.06 VIlI Domestic/ 1000 MT/Day ammonia Export LNG 2.4099 V Domestic/ 4000 MT/Day Export Ureo -1.82 IX Domestic/ 1725MT/Day Export Power 2.745 III e, Domestic/ 35,82,34,454 I Export KWH/Yr " Product P1 (Methanol) : Methanol is PI because the inceased net value of the gas through conversion into methanol is the highest/maximum, 3.97 among all the products. Methanol can be the replacement of diesel and kerosene for power, industry and household purpose. The forecast of yearly demand of methanol in Bangladesh for the replacement of diesel and kerosene have been calculated. As in the world there are already several 2000 MT/ Day units in operation, Bangladesh can start a methanol plant starting production in 2005 and after 2 years to meet the increased demand Bangladesh can go another plant of same capacity. 2005 year is considered, because to start a plant a lead time of 3 or 4 years is required. The total demand of methanol in Bangladesh upto 2020 and at the same time the production of methanol upto 2020 can be estimated. The total amount of gas required (TGRPl) for the production of methanol can be calculated. Then the available gas reserve after meeting the demand for methanol can be calculated by deducting the TGRPI from AGRJ, Average gas reserve. Table 5.2 : World annual demand for methanol (1) Ym World annual demand for methanol, Million MT 1984 13.2 1990 19.2 1995 23.3 2000 27.1 The forecast of annual world demand for methanol is shown 111the figure 5.1. From figure 5.1 it is shown that ?eV--l-b Forecast of annual world demand for methanol y = 0.8668x . 1706.2 R' = 0.9956 i=' 46 •• ~ 41 .6 36 = 31 ~ 26 -g 21 ~ 16 o Q) 11 •• .' o 6 1980 1985 1990 1995 2000 2005 2010 2015 2020 Year --- ._.------_._----- • Series1 --Linear (Series1) L~ .••• _ -----_._------_. - Figure - 5.1 Forecast of annual world demand for methanol TQble5.3: Forecast of annual world demand for methanol World demand of methanol, Million MT 2001 28.2668 2002 29.1336 2003 30.0004 2004 30.8672 2005 31.734 2006 32.6008 2007 33.4676 2008 34.3344 2009 35.2012 2010 36.068 2011 36.9348 2012 37.8016 2013 38.6684 2014 39.5352 2015 40.402 2016 41.2688 2017 42.1356 2018 43.0024 2019 43.8692 2020 44.736 For this current year, 2001 : Current world market demand of methanol = 28.2668 million MT. Methanol can be a replacement of diesel & kerosene for power, industry and household purpose. Methanol to replace Diesel. I MTof diesel produces same heat as 1.983 MT of methanol produces. Table 5.4 : Annual demand of methanol for the replacement of diesel in Bangladesh. (4) Year Demand of diesel in Corresponding methanol, Bangladesh for the Million MT replacement by methanol, Lac MT 1999 2.29 0.4541 2000 2.247 0.4455 2001 2.67 0.5294 2002 2.88 0.5711 2003 3.115 0.6177 2004 3.364 0.6670 2005 3.63 0.7198 2006 3.92 0.7773 2007 4.24 0.8407 2008 4,58 0.9082 2009 4.94 0.9796 2010 5.34 1.0589 Methanol to replace kerosene. 1 MTof kerosene produces same heat as 2 MT of methanol produces. Table 5.5 Annual demand of methanol for the replacement of kerosene in Bangladesh. (4) Year Demand of kerosene in Corresponding methanol, Bangladesh for the Million MT replacement by methanol, Lac MT 1999 2.604 0.5208 2000 2.682 0.5364 2001 2.764 0.5528 2002 2.847 0.5694 2003 2.93 0.586 2004 3.02 0.604 2005 3.11 0.622 2006 3.2 0.64 2007 3.3 0.66 2008 3.395 0.679 2009 3.5 0.7 2010 3.603 0.7206 Bangladesh is now importing formal dehyde (HCHO),acetic acid (CH3COOH), chloromethane (CH3Cl) which can be produced from methanol. Bangladesh imports formalin/yr = 11039 Kg. (13) = 11.039 MT Chemjcal reaction of HCHOproduction: To produce 11.03 MT of formalin 11.7786 MT of methanol is required. ------(Al Bangladesh imports acetic acid/Yr = 827020 Kg (13) = 827.02 MT Chemical reaction for CH3COOHproduction, Rh,. CI.bOH + CO To produce 827.02 MT of acetic acid per year 450.73 MY of CHJOH is required. ------(B) Bangladeshimportschloromethane(CHJCl)/yr- 514702 Kg (13) = 514.702 MT Chemical reaction for chloromethane (CH3C1)production, CH30H + HCl ZnC!. CH3Cl+ H20 To produce 514.702 MT of CH3Cl 324.26 MT of methanol is required. ------(C) From equation (A), (B) & (C) it is shown that annual demand of methanol for formalin, acetic acid, and chloromethane production = 11.7786 + 450.73 + 324.26 = 786.7686 MT, which is very small amount. So, it can be neglected. Adding table 5.4 and table 5.5 , table 5.6 is gernerated : Table 5.6 : Annual share of world demand for methanol by Bangladesh for the replacement of diesel and kerosene. Year Demand of methanol for the replacement of diesel and kerosene, MillionMT 1999 0.9749 2000 0.9819 2001 1.08226 2002 1.1405 2003 1.2037 2004 1.2710 2005 1.3418 2006 1.4173 2007 1.50079 2008 1.5872 2009 1.6796 2010 1.7794 The forecast of annual share of world demand for methanol by Bangladesh for the replacement of diesel and kerosene is shown In figure 5.2 . From the graph 5.2 it is shown that: Table 5.7 : Forecast of annual share of world demand for methanol by Bangladesh for the replacement of diesel and kerosene. Year Demand of methanol for the replacement of diesel and kerosene, Million MT 1999 0.836 2000 0.91 2001 0.984 2002 1.058 2003 1.132 2004 1.206 2005 1.28 2006 1.354 2007 1.428 2008 1.502 2009 1.576 2010 1.65 2011 1.724 2012 1.798 2013 1.872 2014 1.946 2015 2.02 2016 2.094 2017 2.168 2018 2.242 2019 2.316 2020 2.39 From this table annual (2001) share of world demand for Forecast of annual share of world demand for methanol by Banglades'h" 0 ,074x - 147 09 R "0,9908 4 0 • 3.5 u• ••e 3 m• ~ ~ '.5 o C- e , e , 0• .2 o"I•E , 1.5 -0 • , 0• •0 0.5 e e < 0 1995 2000 2005 2010 2015 2020 2025 Yea r :-.~-~-----~~------Series1 ---Linear{Seri;~- Figure 5.2: Forecast of annual share ofworld demand for methanol by Bangladesh for the replacement of diesel and kerosene. methanol b)' Bangladesh for the replacement of diesel and kerosene is ~ 0.984 Milhon MT. BDp1 (For 2001) '" 0.984 Million MT. From this table, Total (2001- 2020) '" 33.34 Million MT. Total demand (2001-2020) of methanol by Bangladesh for the replacement of diesel and kerosene is ~ 33.34 Million MT. TBDpI '" 33.34 Million MT If Bangladesh produces a methanol plant which has production capacity per day = 2000 MT/Day. If 1 year = 300 working days then production capacity per year ~ 60,0000 MT/Yr = 0.6 Million MT/Yr. That means, EBPPI '" 0.6 Million MT/Yr If Bangladesh starts the methanol plant at -2005 with production capacity of 0.6 Million MT per year and if at 2007 Bangladesh increases its production capacity 2 times that means 1.2 Million MTper year. Then upto 2020. Total production of methanol will be, TEBPP1 = 0.6 x 2+1.2xI4=18 Million MT. Total gas required for this 18 Million MTmethanol, TGRp1 ~ 18 x lOu x 21.51 MeF of gas = 387180000 MCF of gas = .38718 TCF of gas Net recoverable gas reserve = 11.49 TCF. Available gas reserve, AGR1= 11.49-TGRpl = (11.49 - .38718) TCF = 11.10282 TCF of gas. Product P2 (eNG to replace petrol) : eNG to replace petrol is P2 because increased net value of the gas for it IS the 2nd highest, 3.2142 among all the products. The forecast of yearly demand of petrol in Bangladesh for the transport sector is calculated from the yearly demand of petrol in Bangladesh for the transport sector for 10 yrs. Current demand of petrol for the transport sector (BOn) and gas required to replace the same amount of petrol (GRI'2)are calculated. Then upto 2020 years the total demand of petrol for the transport sector (TBD?2)and the gas required to replace petrol upto 2020 (TGRI'2)are calculated. Then again available gas reserve is calculated. Table 5.8 : Yearly demand of petrol In Bangladesh for the transport sector. (4) Demand of petrol for the transport sector, Lac MT 2000 2.59 2001 2.84 2002 3.13 2003 3.44 2004 3.78 2005 4.16 2006 4.58 2007 5.04 2008 5.54 2009 6.1 2010 6.71 The forecast of yearly demand of petrol in Bangladesh for the transport sector is shown in figure 5.3. From figure 5.3 it is shown thilt : Table 5.9: Forecast of yearly demand of petrol in Bangladesh for the transport sector. Year Demand of petrol'for the transport sector, Lac MT 2001 2.7079 2002 3.1158 2003 3.5237 2004 3.9316 2005 4.3395 2006 4.7474 2007 5.1553 2008 5.5632 2009 5.9711 2010 6.379 2011 6.7869 2012 7.1948 2013 7.6027 2014 8.0106 2015 8.4185 2016 8.8264 2017 9.2343 2018 9.6422 2019 10.0501 2020 10.458 Total (2001 - 2020) ~ 131.659 (LacMTJ= 13.1659 (MillionMT) n Forecast of yearly demand of petrol y = 0.4079x - 813.5 R2 = 0.9823 12 10 ~ >- 8 "0 ~• ~ u 6 •c ~ 0 4 2 o 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Year --Linear (Series1).~ , Figure - 5.3 Forecast of yearly demand of petrol in Bangladesh for the transport sector. For this current year (2001) : Current demand of petrol in Bangladesh for the transport sector, BDp2 = 2.7070 Lac MT = 2,70,790 MT/yr. 45.2 MCF of gas produces same heat as 1 MT of petrol produces. Gas required to replace petrol, GRP2 = 270790 x 45.2 = 1,22,39,708 MCFjYr Upto 2020: Total demand of petrol in Bangladesh for the transport sector upto 2020, TBDp2 = 131.659 Lac MT = 131,65,900 MT Total gas required to replace petrol upto 2020, TGRp2 = 13J65900x45.2 = 5950,98,680 MCF = 0.595 TCF After producing product p) upto 2020, Available gas reserve = 11.10282 TCF. So now, Available gas reserve, AGRl = 11.10282 - TGRp2 = 11.10282 - 0.595 = 10.50782 rCF. Product P3 ( Power) : PO\"Tris PJ because the increased net value of the gas through conversion into power IS the 3rd highest, 2.745 among all the products. The forecast of annual "Consumption of natural gas 10 Bangladesh for power generation is calculated from annual consumption of natural gas in Bangladesh for power generation from 1975 to 1998. From the graph, the gas required to produce the power in 2001 is calculated which is GRPi.Then the gas required to produce the power upto 2020, TGRPiare also calculated from the graph. Then agoin available gas reserve is calculated. Table 5.10: Annual consumption of natural gas in Bangladesh for power generation. (20) Year Consumption of natural gas in Bangladesh for powergeneration, BeF 1975 8.841 1976 10,85 1977 13.081 1978 14.59 1979 15.941 1980 18.904 1981 22.251 1982 27.698 1983 30.299 1984 38,116 1985 39,81 1986 51.774 191:\7 59.221 1988 62.292 1989 72.461 1990 78.258 1991 83.803 1992 88.117 1993 92.064 1994 103,908 1995 106.593 1996 107.24 1997 120.376 1998 136.802 " The forecast of annual consumption of natural gas in Bangladesh for power generation is shown in figure 5.4. From figure 5.4 it is shown that: Table 5.11: Forecast of annual consumption of natural gas in Bangladesh for power generation. YCfl,r Consumption of natural gas in Bangladesh [or power generation, BCF 2001 158 2002 168 200.1 178 2004 188 2005 199 2006 212 2007 218 2008 228 2009 238 2010 252 2011 265 2012 274 2013 286 2014 302 .2015 312 2016 324 2017 336 2018 349 2019 364 2020 376 Forecast of annual consumption of natural gas in Bangladesh for power generation R2 = 0.9912 400 • 380 ._~--~~--, ------360 '" ,====::- i__ ._!.__ _ _ E ~~g---~---_.~------~=-= ==-_~=_.: ------. ,_. " 300 -----_._--- -•c 280I-~--.--~~------~--.-- .'----- .--'------~--:-/ ------...----.------0 260 ---~--~- ... ------240 c -c 0 - 220 - - --- ~------~- -_._----- , ••() ,_...._--_.!_---~~~~~~~~--~~--~~------0. 200 " m 180 ,~~------~------_.- - . -- ---._------~--~-- -~--_. "I E - 160 0 140 .-~------~ ---- -~-'-, ------" ~._. -- ._~-- C" ------~--~------.------0 120 0 100 • ~8 ---- -,, -=--=-.- ---~._- -~=--=---~-~----- C 40 -----~._------~~------c" -~~-,, ------,~----~----,--_._----_. <: 20o 1970 1980 1990 2000 2010 2020 2030 Year r Series1 ~- Poly. (5erie51)--1 1- • -~~~-~------ Figure 5.4: Forecast of annual consumption of natural gas in Bangladesh for power generation. Total (2001 - 2020) ~ 5227 BCF ""5.227 rCF For this current year (2001) : Gas required to produce the power in 2001, GRp3 ""0.158 rCF Upto 2020: Total gas required to produce the power upto 2020, TGRp3 ~ 5.227 TCF After producing product P2 upto 2020, Available gas reserve ~ 10.50782 TCF. So now, Available gas reserve, AGR, ~ 10.50782 - TGRp3~ 10.50782 - 5.227 = 5.28082 TCF. Product Pi (eNG to replace diesel} : CNG to replace diesel is P4because the increased net value of gas through conversion into CNGto replace diesel is the 4th highest, 2.586 among all thc products. The next procedure is similar to product P2. Table 5.12 Yearly demand of diesel in Bangladesh for the transport sector. (4) YeM Demand of diesel for the transport sector, Lac MT 20ao 9.31 2001 10.08 2002 10.88 2003 11.76 2004 12.7 2005 13.7 2006 14.8 2007 15.99 2008 17.27 2009 18.65 2010 20.15 Forecast of Yearly dem and of diesel y = 1,0746x -2140,S 35 R' = 0,9887 _30 I- "u 25 j 20 -g- 1 5 ro ~ 10 o 5 " o 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Year ------._----_.._------~- • Series1 --Linear (Series1) ------,------Figure - 5.5 Forecast of yearly demand of diesel in Bangladesh for the transport sector. The forecast of yearly demand of diesel in Bangladesh for the transport sector is shown in figure 5.5. From figure 5.5 it is shown that: Table 5.13 : Forecast of yearly demand of diesel in Bangladesh for the transport sector. Year Demand of diesel for the transport sector, Lac MT 2001 9.7746 2002 10.8492 2003 11.9238 2004 12.9984 200S 14.073 2006 IS.1476 2007 16.2222 2008 17.2968 2009 18.3714 2010 19.446 2011 20.S206 2012 21.S952 2013 22.6698 2014 23.7444 2015 24.819 2016 25.8936 2017 26.9682 2018 28.0428 2019 29.1174 2020 30.192 Total (2001 - 2020) = 399.3 (LacMT)= 39.93 (MillionMT) Forthis current year (2001) : Current demand of diesel in Bangladesh for the transport sector, BDN = 9.7746 Lac MY = 9,77,460 MT. 43.1 MCF of gas produces same heat as 1 MT of diesel produces. Gas required to replace diesel, GRP4 = 9,77,460 x 43.1 = 421,28,526 MCF jVr Upto 2020 : Total demand of diesel in Bangladesh for the transport sector upto 2020, TBDp4 = 399.3 Lac MT = 3,99,30,000 MT Total gas required to replace diesel upto 2020, TGRp4 = 39930000x43.1 = 1,720,983.000 MCF = 1.7209 TeF After producing P3 upto 2020, Availablegas reserve = 5.28082 TeF. Available gas reserve, AGR4 = 5.28082 - TGRp4 =5.28082- 1.7209 = 3.55992 TCF. After producing the above four selected products upto 2020 , the remammg gas reserve is 3.55992 TCF, But Bangladesh has already utilization of natural gas in the industrial, commercial, domestic sectors and fertilizer factories. These sectors are not considered in the above study, Because these sectors consume only small quantity of natural gas . Urea is not taken into further consideration because the increased net value of the gas through conversion into urea, INVi is negative. But the current urea factories which are running now will continue in the future. Natural gas will be used to fulm the increased demand of the above sectors upto 2020. As methanol can be used as fuel in furnaces, boilers and gas turbines. It covers a certain portion of the consumption of the natural gas in the industrial sector. So the gas consumed by the above sectors upto 2020 have to be calculated to check whether the requirement of the natural gas for the above sector exceed the available gas reserve ( 3.55992 TCF). Gas required upto 2020 for fertilizer factories, industrial, commercial and domestic sectors. (28) . 1. Fertilizer Factory The gas consumed by the fertilizer factory upt02020wil\be = 1160BCF= 1.16TCF. Industrial and commercial sector: The gas consumed by these sectors upto 2020 willbe = 890 BCF = 0.890 TCF 3. Domestic sector : The gas consumed by these sectors upto 2020 will be = 396 BCF = 0.396 TCF Total gas consumed by these sectors upto 2020 willbe = (1.16 + 0.890 + 0.396) TCF = 2.446 TCF ( But our available gas reserve = 3.55992 TCF) 6. LIMITATIONOF STUDY: Methanol: The construction of methanol plant requires an enormous amount of money. The investment cost of 2000 Ton per day methanol plant is about 326 million' US$. Methanol is generally consumed as a raw material for the production of formalin, MTBE, acetic acid, cloromethane, urea-formaldehyde, glue, resin etc in the world, while Bangladesh has the minimal markets at present. Methanol is highly volatile and flammable. It is highly toxic. So, it requires special container to carry. C.N.G: Natural gas is an excellent fuel for internal combustion engmes. Favorable natural gas properties make it possible to use in high compression ratio making the engine energy efficient. It can alleviate thc problems associated with air pollution in urban centers. In spites of these advantages CNG vehicles need more space for storing CNG. The energy density of natural gas at ambient temperatures is far less than that of gasoline and diesel on a volumetric basis. The infrastructure for using natural gas in vehicles has hardly devcloped.The infrastructure includes CNGconversion facilities, a net work for refueling stations and trained personnel and work shops for servicing eNG vehicles. The vast majority of the people still have concerns about the safety of eNG for vehicle applications although this is not based on facts. There is a need for educating the people. L.N.G: For economic viability a LNGproject requires commitment of (2-4)TCF of gas. This represent an undesirability high proportion of the currently proven recoverable reserves ofgas. The capital cost of even a minimum size LNGplant is very high, probably more than $3 billion for a plant handling 500 MMSCFD. Bangladesh at present has no deep sea port facilities that could handle LNGtankers, So the project would be further handicapped by very large investments in the infrastructure, unless shipping facilities could handle other products as well. The location of Bangladesh relative to potential market in Japan, Korea, North America or Europe is much less favorable than those of other potential suppliers with large under utilized gas resources (e.g. Northern Australia, Indonesia, Malaysia, Thailand for Pacific markets and the Middle East and North Africa for European Markets). The world market for LNGis already highly competitive and will become more so in the future given the huge unutilized gas resources available. Urea: The increased net value of the gas through conversion into urea is negative. One of the reasons is the process capital intensivity and energy intensivity. Another reason is the competitive price. The urea export market is prone to periods of shortages and surplus resulting in extreme price volatility. The price competition of urea is vcry much time dependent. Power: The key constraints affecting the performance of the power sector are as follows: • The government dictates and regulates the 'autonomous' power sector entities. This has sometimes resulted in overlapping and unclear responsibilities with lack of accountability in terms of sector entities operational performance and service standards. • The transfer point of energy in generation, transmission and distribution are not transparent. The energy flow in the system lack proper accountability, as a result it manifests fabricated operational data. • There arc no effective systems Of cost accounting and asset accounting by plants, no cost or profit centers and no effective operational performance targets to measure the performance of the different parts of the system such as generation, transmission and distribution. • Lack of accountability and discipline among the employees are major constraints. Pressure from trade union makes it very difficult to enforce discipline among the employees. 7. CONCLUSION: Methanol: Methanol is selected as the best product to produce from natural gas in this study. Because the increased net value of the gas through conversion into methanol is the highest for all the products considered in this study. Methanol can be used in those places, where gas is available but conventional petroleum based liquid fuels are in short supply, where fire wood is becoming scarce and where imported kerosene is wide spread but expensive household fuel. In Bangladesh there is high potential for use methanol as a liquid fuel to replace kerosene and diesel fuel. Replacement of methanol by other fuels in boilers, furnaces, gas turbines or other similar plant requires only relatively simple modifications to existing equipment. For large stationary units such as in power generation stations, it is used in diesel engines substitution for normal diesel fuel. C.N.G : CNG is the next best selected product of this study. Conversion of gasoline or diesel engines to CNGis economicallyviable for light, commercial, city based taxis, buses, vans and light trucks. Because CNGis relatively inexpensive compared to gasoline or diesel fuel. In the present market price of petro!, it will result in 72% reduction in fuel cost. From the technical point of view, natural gas is a safe vehicle fuel. It rises upward when released into open air, therefore there is minor risk of ignition. The maintenance cost is less for CNG driven vehicles. It takes better care of engInes because of more complete combustion which leaves hardly any residue as in the case of liquid fuel. The main competitor of CNGis LPG. But LPGis not available in Bangladesh , rather has to be imported. The use of CNG in Bangladesh can save valuable foreign exchange particularly because there is at present little prior commitment to LPGuse. It also reduce the dependency on imported liquid fuel and save the hard earned foreign currency. Locomotives offer the most practical opportunity for natural gas because conversion can be most easily mandated, managed and financed by one central authority. Locomotivessuitable for conversion represent (10-20%)of the total automotive diesel fuel. In the long term, natural gas can displace (80%) of the automotive diesel fuel consumption i.e virtually all diesel engines can be converted or replaced. Some diesel fuel will always be needed because ( 10-20% ) must be combined with natural gas to promote ignition and flame speed. In spite of some clear advantages, CNG is still not used on a large scale in vehicles in the country although it has been introduced since 1984. Before raising the petroleum price in 1997, the conversion of vehicles was not satisfactory. The number of converted vehicles by RPGCLwas 116 in 1996 since introduction in 1984. But since the second half of the year 1997, when the government raised the petrol price, the demand for CNG seemed to be rising among the vehicle owners. The rate of conversion declined in the following year for various reasons. The most important reasons are the insufficient eNG refueling facilities and unsatisfactory services from the existing refueling stations. L.N.G: LNGoffers Bangladesh a means for export of natural gas directly 10 a form already familiar in international markets. There is "lso some potential for local use in Bangladesh as a replacement for oLhertypes of automotive fuel. With an aggressive promotion program it is believed that conversion of locomotives, trucks and other outlets could build a market for 2-3 BCF(year or 50,000 Ton/Year of LNGin Bangladesh. With total proven reserves of TCF as given by BOGMCand JCE (James Chemical Engineering's) estimate of cumulative basic consumption of 8 to 9 TCF by 2010, reserves are marginal for consideration of an LNGplant. It has for a long time been considered as a potential earner of foreign exchange for Bangladesh. Urea: From the financial point of view it is not logical to build an urea plant because the increased net value of the gas through conversion into urea is only -1.82 US$(MCF which is negative. The international price of urea varies in wide ranges. So if the price of urea improves the increased net value of the gas through conversion into urea will also be improved. So, this value can not be the only criteria to build an urea plant. But in Bangladesh many urea plants are now in production. Because historically, an increase of about 12% per year in fertilizer application, with associated increases in cropping intensity and irngation area, has been able to sustain an average growth of 4% pcr year in food production (3). With this increase in food production ovcr the last few years Bangladesh is very close to achieving self sufficiency in food production for the increased population. Planning to increase domestic food production and thereby eliminate expensive imports is faced with a further problem because all potential arable area IS already cropped, so the future increase in production will have to depend on increase in multiple cropping. increase in irrigation. increased and improved use of HYVplanting. increased and improved fertilizer utilization. Of these above considerations, only fertilizer utilization comes within the scope of this report. Table 7.1 : The growth of rice, tea, wheat, vegetable production with increased ,;a1eof fertilizer (urea) from 1977-1978 to 1997-1998. (81 (91 (101 (11) (12) I Year The sale of Production Production Production Production urea of rice of tea of wheat of (000 MT) (000 MT) (000 MT) (000 MT) vegetable (000 MT) 1977-1978 47984 12763 81620 342500 1589 1978-1979 470.55 12646 84448 586227 1623 1979-1980 531.93 12539 80710 809710 1688 1980-1981 560,53 13662 80710 1075255 1766 1981-1982 518.78 13415 87541 952110 1894 1982-1983 619.11 13991 85480 1078070 19994 1983-1984 708.07 14279 90247 1192305 2036 1984-1985 831.80 14391 93031 1440755 2020 1985-1966 647.31 14802 83550 1025520 1986 1986.1987 794.95 15163 95421 1034789 1960 1987-1988 1022.19 15413 84217 1048015 2214 1988-1989 1023.35 15544 90969 1021959 2023 1989-1990 1367,74 17857 97621 890000 2076 1990-1991 1323.397 17852 87528 1004290 2292 1991-1992 1533.481 18252 102771 1065054 2466 1992-1993 1547.407 18340 145230 1175630 2523 1993-1994 1578.955 18042 107825 1131050 2603 1994-1995 1748.459 16833 112444 890000 2670 1995-1996 2045.536 17687 113877 1369130 2715 1996-1997 2119.883 18883 105829 1454100 2759 1997-1998 1872.725 18862 117528 1802815 2819 From the table it is shown that the production of rice, tea, wheat and vegetables increases with increased sale of urea. Now Bangladesh is exporting tea and vegetables. With this increased use of fertilizer Bangladesh will achieve self-sufficiency in food. Now many people engaged in agricultural sector reduces the unemployment problem. Unemployment problem IS a curse of Bangladesh. So the large factory like urea fulfills the demand of fertilizer which increases food production and reduces unemployment problem. In economical term, it is called "multiplier effect".Though the increased net value of gas is here negative but the above factors give positive supports to build urea factory in Bangladesh. Power: Power sector cannot collect necessary revenue because of system loss. It is seen that the average fuel cost of thermal generation of the power plants in the east and west zone under BPDB were Tk. O.579jKWH and Tk. 4.456jKWH respectively (20). As the Jamuna bridge already has been completed, the western zone will be under gas network very soon. To minimize fuel cost it is necessary to convert liquid based power station into gas based power station gradually. It can be envisaged that distribution system improvement and power plant rehabilitation will have immediate efficiency gains. But further investment in power generation can not be avoided. That should be implemented in parallel after streamlining the distribution sector and rehabilitating the old power plants. 8. RECOMMENDATION: The objective of the study is to maJomlze the benefits from the gas resources. This study examines the alternative uses of the natural gas to determine its best uses. A method is developed to bring the benefits of the alternative uses of the natural gas to a common scale and to compare benefits. A term the "increased net value of the gas"through conversion into defferent products is introduced to compare financial benefit. This project studies many products such as methanol, eNG, Urea, NH3, LNG, power etc, which can be produced from natural gas resources ofBangladesh. 1. Methanol is selected as the best product. Because the increased net value of the gas through conversion into methonal is 3.97 US$/MCF, which is greater than the gas export value, GEV{2.5US$jMCF). Methanol can be the replacement of diesel and kerosene for power, industry and household purposes. Replacement by methanol of other fuel in boilers, furnaces, gas turbines, or other similar plant requires only relatively simple modifications to existing eqipment. For large stationary units such as in powe generation stations, it is used in diesel engines substitution for normal diesel fuel. 2. eNG to repalce petrol is selected as the 2nd highest product Bacause the increased net valUe of the gas through conversIOninto eNG to repalaee petrol is 3.2142 US$jMCF, which is greater than the gas export value, GEV(2.5 US$jMCF). Conversion of gasoline or diesel engines to CNGis ecomnimically viable for light, commercial, city based taxis, buses, vans and trucks. Because eNG 1S relatively inexpensive compared to gasoline or diesel fuel from the technical point of view, natural gas is a safe vehicle fuel. The maintenance cost is less for CNG driven vehicles, It takes better care of engines because of more complete combustion which leaves hardly any residue as in the case of liquid fuel. 3. Power is selected as the 3rd highest of the product. Because the increased net value of the gas through cnversion into power is 2.745 US$j MCF. There is energy shortage in Bangladesh. More energy will be required for economic development and to fulfill rural demand. Liquid fuel is very costly to produce power. Gas can be used to produce power 4. eNG to replace diesel is the selected as the 4th highest product Because the increased net value of the gas through conversion into CNG to replace diesel is 2.586 US$jMCF which is greater than the gas export value, GEV,(2.5 US$jMCF). For urea, "the increased net value of the gas~ is only -1.82 US $jMCF which is negative. The international price of urea varies in wide ranges. With the increased use of fertilizer Bangladesh will achive self-sufficiencyin food. Many people engaged m agricultural sector will reduce the unemployment problem. Afuture study may be undertaken to search production of urea which includes its multiplier effect. - REFERENCES 1. BOGMC(Bangladesh Oil Gas and Mineral Corporation) Gas Based Projects Feasibility Study, Strategy for future utilization of natural gas - Volume (3), James Chemical Engineering Inc. Connecticut USA, 1985. 2. 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