Future Scenarios for the Bangladesh Petroleum Sector Development Under Strengthening of Hydrocarbon Unit in the Energy and Mineral Resources Division (Phase-II) ADB Grant 0019: GTDP Prepared for: HYDROCARBON UNIT Energy and Mineral Resources Division Government of the People’s Republic of Bangladesh Originally submitted: October 10, 2011 Revised: June 5, 2012 TABLE OF CONTENTS PAGE 1 EXECUTIVE SUMMARY ........................................................................................................ 1 2 INTRODUCTION ...................................................................................................................... 4 3 BANGLADESH GAS DEMAND FORECASTS ...................................................................... 5 3.1 INTRODUCTION .............................................................................................................. 5 3.2 HISTORICAL GAS DEMAND ......................................................................................... 6 3.3 SUMMARY OF PREVIOUS FORECASTS ..................................................................... 9 3.4 DETAILS OF PREVIOUS FORECASTS ....................................................................... 12 3.4.1 Wood Mackenzie .................................................................................................... 12 3.4.1.1 Total Gas Demand Forecast ...................................................................... 12 3.4.1.2 Power Sector Demand ............................................................................... 17 3.4.1.3 Non-Bulk Sector Demand ......................................................................... 20 3.4.1.4 Fertiliser Sector Demand ........................................................................... 22 3.4.2 Petrobangla ............................................................................................................. 23 3.4.2.1 Total Gas Demand ..................................................................................... 24 3.4.2.2 Power Sector Demand ............................................................................... 26 3.4.2.3 Captive Power Sector Demand .................................................................. 27 3.4.2.4 Fertiliser Sector Demand ........................................................................... 28 3.4.2.5 Non- Bulk Sector Demand ........................................................................ 30 3.4.3 ECON Analysis ....................................................................................................... 31 3.4.4 Global Data Forecast............................................................................................... 34 3.5 NEW FORECAST SCENARIOS .................................................................................... 35 4 GAS INFRASTRUCTURE AND POTENTIAL ENERGY SUPPLY SOURCES ................. 39 4.1 GAS TRANSMISSION AND MARKETING INFRASTRUCTURE ............................ 39 4.2 EXISTING FIELDS ......................................................................................................... 41 4.2.1 Field Production History ......................................................................................... 42 4.2.2 Petrobangla Owned Producing Gas Fields ............................................................. 43 4.2.2.1 Titas Gas Field, Block 12, BGFCL ........................................................... 43 4.2.2.2 Bakhrabad Gas Field, Block 9, BGFCL .................................................... 43 4.2.2.3 Habiganj Gas Field, Block 12, BGFCL .................................................... 44 4.2.2.4 Narsingdi Gas Field, Block 9, BGFCL ..................................................... 44 4.2.2.5 Meghna Gas Field, Block 9, BGFCL ........................................................ 45 4.2.2.6 Sylhet (Haripur) Gas Field, Block 13, SGFL ............................................ 45 4.2.2.7 Kailash Tila Gas Field, Block 13, SGFL ................................................... 46 4.2.2.8 Rashidpur Gas Field, Block 12, SGFL ...................................................... 47 4.2.2.9 Beani Bazar Gas Field, Block 14, SGFL ................................................... 48 4.2.2.10 Saldanadi Gas Field, BAPEX .................................................................... 48 4.2.2.11 Fenchuganj Gas Field, Block 14 ............................................................... 49 4.2.2.12 Shahbazpur Gas Field, Block 10, BAPEX ................................................ 49 4.2.3 Petrobangla Owned Undeveloped Gas Fields ......................................................... 50 6/5/2012 i Gustavson Associates 4.2.3.1 Begumganj Gas Field ................................................................................ 50 4.2.3.2 Semutang Gas Field ................................................................................... 50 4.2.3.3 Kutubdia Gas Field .................................................................................... 50 4.2.4 IOC Operated Gas Fields ........................................................................................ 50 4.2.4.1 Jalalabad Gas Fields, Block 13, IOC: Chevron ......................................... 50 4.2.4.2 Moulavi Bazar Gas Field, Block 14, IOC: Chevron ................................. 51 4.2.4.3 Bibiyana Gas Field, Block 12, IOC: Chevron ........................................... 51 4.2.4.4 Sangu Gas Field, Block 16, IOC: Cairn/Santos ........................................ 52 4.2.4.5 Bangora Gas Field, Block 9, IOC: Niko/Tullow ....................................... 53 4.2.4.6 Feni Gas Field, block 15, IOC: Niko ......................................................... 53 4.2.4.7 Kamta Gas Field, Block 9, Suspended: Petrobangla ................................. 54 4.2.4.8 Chattak Gas Field, Block 12, Suspended: Niko & Bapex ......................... 54 4.3 PLANNED EXPLORATION .......................................................................................... 55 4.3.1 FY 2010 Plan .......................................................................................................... 55 4.3.2 Short Term Plan (expected completion by June 2013) ........................................... 56 4.3.2.1 Actions to be Taken by the National Gas Company ................................. 56 4.3.2.2 Actions to be Taken by International Oil Companies ............................... 57 4.3.3 Intermediate Term Plan (expected completion by December 2015) ...................... 57 4.3.3.1 Actions to be Taken by the National Gas Company ................................. 58 4.3.3.2 Actions Taken by International Oil Companies ........................................ 58 4.3.4 Summary ................................................................................................................. 58 4.3.5 Steps to Ensure the Implementation of the Plans .................................................... 58 4.4 GAS PRODUCTION AUGMENTATION (PREPARED BY SCHLUMBERGER) ..... 59 4.5 CONVENTIONAL GAS RESOURCE EXPLORATION .............................................. 60 4.5.1 Prospects ................................................................................................................. 60 4.5.2 Leads ....................................................................................................................... 60 4.5.3 Unmapped Resources.............................................................................................. 61 4.6 UNCONVENTIONAL GAS RESOURCES ................................................................... 63 4.6.1 Coal Bed Methane (CBM) ...................................................................................... 63 4.6.2 Shale Gas ................................................................................................................ 65 4.6.2.1 International Experience ............................................................................ 65 4.6.2.2 Shale Gas Prospects in Bangladesh ........................................................... 67 4.6.2.3 Shale Gas Development Initiative in Bangladesh ..................................... 68 4.6.3 Thin Beds ................................................................................................................ 69 4.7 SUPPLEMENTAL ENERGY SOURCES....................................................................... 69 4.7.1 LNG Imports ........................................................................................................... 70 4.7.2 Natural Gas Pipeline Imports .................................................................................. 71 4.7.3 Coal ......................................................................................................................... 72 4.7.3.1 Jamalganj Coal Field ................................................................................. 74 4.7.3.2 Barapukuria Coal Field ............................................................................. 74 4.7.3.3 Khalashpir Coal Field ................................................................................ 74 4.7.3.4 Dighipara Coal Field ................................................................................. 75 4.7.3.5 Phulbari Coal Field .................................................................................... 75 6/5/2012 ii Gustavson Associates 4.7.3.6 Coal Summary ........................................................................................... 75 4.7.4 Liquefied Petroleum