Bangladesh let international company to sell natural gas to private sector

SALEEM SAMAD

BANGLADESH FOR the first time allowed an Australian energy company to sell gas to the private entrepreneurs within the country, amidst widespread criticism by social justice activists.

The state-owned energy exploration company Petrobangla, after protracted delays signed on Monday a gas purchase and sales agreement (GPSA) with international oil company Santos Limited.

The gas demand in Chittagong port and industrial city in south Bangladesh is 420-430 million cubic feet per day (MMCFD) against gas supply from possible sources reduced from 280 to 240 MMCFD.

Santos can now provide directly to gas starved Chittagong market to sell its share of natural gas to willing downstream consumers.

Petrobangla was scheduled to sign the GPSA in July last year, but it was delayed as the government Energy and Mineral Resources Division failed to take decision and finalize official formalities in time.

Petrobangla Chairman Prof. Hossain Monsur told reporters that the industrial production and commercial activities in Chittagong was facing serious crisis due to gas supply shortage, adding that he was hopeful about resolving the gas crisis in Chittagong by 2012 with support from the international oil companies, writes English daily The Sun.

Under the amendment to GPSA will allow gas starved industries in Chittagong. The export processing zones (EPZ) in Chittagong and a Japanese fertilizer factory have expressed to negotiate gas purchase directly from Santos, source said.

John Chambers, President of Santos Sangu Field Limited told English daily The Sun that he has received proactive responses from businesspersons in Chittagong who have already invested millions of dollars in infrastructure sector. But could not begin operation of their industrial productions due to gas crisis.

Entrepreneurs and investors in Chittagong demands primary fuel at any price to accelerate economic growth, Santos executive said.

Last year Santos acquired U.S, energy giant Cairn Energy Sangu Field Limited, which entered into Bangladesh in 1993. There is another stake of Sangu field which belongs to multinational company Halliburton.

Santos has plans to invest $120 million for the wells, drilling and connecting to national gas grid and complete in two years, 2012.

Economics Professor Anu Muhammad and activist of National Committee to Protect Oil, Gas, Mineral Resources, Port and Power said the bureaucrats in connivance with politicians were bent on giving away production sharing contracts to international energy giants. Whereas, the state-owned BAPEX was competent for oil and gas exploration, as they have demonstrated their skills, observed the activist.

Saleem Samad, an Ashoka Fellow is an award winning investigative journalist based in Bangladesh. He specializes in Jihad, forced migration, good governance and politics. He has recently returned from exile after living in Canada for six years. He could be reached at saleemsamad@hotmail.com