Power & Energy _Presentation_M Tamim

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Power and Energy:Bangladesh Scan

M Tamim

PMRE Dept, [email protected]

Jan 2009



Presentation Outline

Background

Last Ten Years

Present Status

Was Petrobangla sleeping?

Petrobangla Limitation

What to do? POWER

Way Forward



Background

Gas Discovered 1959 (chattak1) First Commercial Use 1962 (CCF)

Dhaka Household Supply 1968 Major fuel switching between 1980-85

After Independence 3 rnd of PSCs First PSC production from 1998

Present production BD 50%: IOC 50%

B k d



0

2

4

6

8

2

P G

I I P t

c f

1950 1960 1963 1977 1988 1990 1996

Year

Res

Rev

Bangladesh Gas Discoveries

C h a t t a k

S yl h e t

R

a s h i d p ur

K a i l a s

h t i l a

T i t a s

H a b i g a n j

B

a k h r a b a d

J a l a l a b a d

S a n g u

Bi b yi a n a M’ b

a z a r

PB discovery between 1977-2004is 2.5 tcf at 3:1 success ratio

Background

Shell (P) Discovery



Last Ten Years

1998 – Bibiyana 4 tcf gas discovered andstranded till 2004 dev request from PB

All IOCs stopped exploration from 1999

2000 – Unocal proposed gas export 2001 – Bangladesh Forex reserve $ 1.3 bil

yearly IPP and gas payment $400 mil

Business unable to open LC Petrobangla behind IOC payment by 6-7 months

2002 – 9-member Gas Util Committee formed



Last Ten Years

2002 Gas Util Comm Report

At least 5 year lead time required between activityand discovery

‘Limited export’ from new discovery is suggested as amarket signal to initiate immediate exploration work

(PB forex burden would reduce) As first right of refusal in the contract, Bangladesh

can always buy the gas (avoiding any export option) Irrespective to the reserve potential (floating on gas!)

if ‘new gas’ is not found, unmet demand will kick-inas early as 2010 If proper measures are not taken the ‘export’ and

‘import’ will not be far apart Encourage increase of gas use



Last Ten Years

No market signal of any kind was given to encourage

vigorous exploration IOCs relinquish all areas of risky investment and just

maintains minimum work program to hold onto thegood prospects

Only Bangura (.44 tcf) is discovered by Tullow withinold seismic data area (Leanest decade in BDexploration history)

In absence of IOC activities, BAPEX was also keptidle from exploration work

To use up Bibiyana reserve, gas use was encouragedin all sectors (the only recommendation implemented

by the governments)



Present Status

Total Production 1800 MMcfd Petrobangla 900 MMcfd

IOCs 900 MMcfd

Demand 2000 MMcfd Unmet demand 200 MMcfd

Due to transmission limitation 100 MMcfd Due to production limitation 100 MMcfd

ik



Tullow

4%

Niko

0.29%

Cairn

3%

SGFL

10%BAPEX

2%

Chevron

41%

BGFCL

40%

P r o d u c t i o n

PGCL

0%

BGSL

6%

JGTDSL

4%

GTCL70%

TGTDCL

20%

PGCL4%

JGTDSL

6%

BGSL

16%

TGTDCL

74%

Power

42%

Loss

3%Dom

10%CNG

5%Tea

0.2%Com

1%

Ind

13%Cap

11%

Fert

15%

Supply Chain1778 MMCFD

Di s t r i b u t i on

T r a n s m

i s s i o n

Consumption

H did i h ?



Annual Gas Demand at Different Growth Rates

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

2 0 1 9

2 0 2 0

T c f

3%

7%

1.28

1.06

0.88

0.72

0.60

Year 2000 consumption = 0.33 Tcf

How did we arrive here?

For the first time demand hasoutgrown all forecast!



Growth of CNG Filling Stations

7 2 3 6 41 41 23 42 647 9 12

18

59

100

123

165

229

0

50

100

150

200

250

1983-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-08

(April '08)

CNG Stations Cummulative Nos.

YEAR

N O S .

1Pabna

86Bogra

1B’baria1Lakhmipur

813Sylhet

116229Total

25Feni

612Comilla

1729Chittagong

12Manikganj

2Tangail

3Narsingdi

3Kishorganj

69N’ganj

627Gazipur

416Savar

5899Dhaka

ConversionWorkshop

CNGStation

Location

Captive Power Grow th wasequally phenomenal

Oil price rising



Was Petrobangla Sleeping?



GAS PRODUCTION-PETROBANGLA & IOC’s : FY 2002-03 to 2007-08(Jan,08)

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

G a s

i n M M S C M

PB 9449 9715 10086 10117 10149 5410

Cairn 1466 1480 1341 1573 1128 417

Chevron 1011 1626 2158 2930 3954 3353

Tullow 0 0 0 76 565 402

NIKO 0 0 198 225 124 33

TOTAL 11926 12821 13783 14921 15920 9615

2003 2004 2005 2006 2007 2008



Production Increase Between 2007 and 2008

17701644Jun17541646May

17571644Apr

16861574Mar

15721496Feb

16711407Jan

20082007Month

AVERAGE DAILY GAS PRODUCTION

(MMCFD)

Avge increase of 120 MMcfd was mostly used by non-bulk



GAS SALES STATEMENT :FY 2002-2008(UPTO JAN,08)

0

2000

4000

6000

8000

10000

12000

14000

16000

G a s i n M M C M

2002-035274 2716 741 1182 128 15 21 0 1269 11347 9.90%

2003-04 5647 2628 904 1313 136 5 23 55 1395 12106 6.69%

2004-05 5975 2661 1070 1456 138 0 23 103 1491 12917 6.70%

2005-06 6354 2523 1384 1791 147 0 21 194 1607 14020 8.61%

2006-07 6262 2647 1770 2194 160 0 21 335 1791 15185 8.30%

2007-08 3711 1313 1248 1445 106 0 17 328 1117 9286 4.83%

Power Fertilizer Captive Industry Comm Brick Tea CNG Dom Total%of

increase

System Loss



System Loss

1 7 7

6 5 5

7 7 6

6 9 2

6 7 8

5 3 7

0

10 0

2 0 0

3 0 0

4 0 0

50 0

6 0 0

70 0

8 0 0

9 0 0

2 0 0 2

/ 0 3

2 0 0 3

/ 0 4

2 0 0 4

/ 0 5

2 0 0 5

/ 0 6

2 0 0 6

/ 0 7

2 0 0 7

/ 0 8 ( U p

t o N o v )

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

G a s i n

M M S C M

Outstanding bill of Tk 270 crore recovered since Jan 2007



Petrobangla Limitation



Petrobangla Limitation Total IOC E&P Investment $1.5 Bill (since 1992)

Resulting 900 MMcfd production

Total PB E&P Investment $0.05 Bill (since 1990) Resulting 15 (30) MMcfd production

Lack of funding and latitude under the present modeof operation do not allow PB to react and rectifymarket imbalance like a true energy company on anemergency basis

If the commercial framework of gas business is notcorrected, Petrobangla will never be able to supplygas reliably

( b )



PSC Gas (December 2007)

10666:340.44(0.3)

Sep ‘10161Bangura2008

13671:293.1

(2.4)

Mar ‘10405Bibiyana

2007

9149:500.45

(0.36)

Recovered100M’bazar

2005

5730:701.19

(0.84)

Mar ’03217Jal’bad

1999

16280:201.03

(0.84)

Ongoing660Sangu

1998

Gas Price

Tk/Mcf

Cum gasshare

IOC:BD

Reserve

(Rec) tcf

CostRecvy yr

Cap Invst

Mill US$

Petrobangla Reality



Petrobangla Reality

OLD GAS vs. NEW GAS

90% of present PB gas was bought from

Shell at US$ 10 million(!) in 1975

Old Gas – less than $ 0.10/Mcf (!)

Cost of finding new gas from Green Fields BAPEX Tk. 65/Mcf (wellhead)

IOCs Tk. 70 – 110/ Mcf (wellhead)

Adding Proc, Trmn, Distbn (Cost+ price is Tk 140/Mcf) PB Weighted Ave price Tk. 93/Mcf

Minimum cost of import Tk. 500/ Mcf !

Chronology of World and



Chronology of World and

Bangladesh Gas Price

6508.065.0069.00- 10.81.0763.473.912007

1753.326.7858.15+1.71.2060702003

1703.226.2052.140.01.1854.662.92000

501.814.7440.25+11.31.1841.347.51994

1352.520.4535.80+112.01.0632.837.91990

5803.427.5331.00+6.30.5015.615.61985

8304.435.6916.25+2.10.477.757.71980

1701.310.4108.080.463.723.71974

Saving%

Eqvgasprice,

$/Mcf

Oil price$/bbl

Exchangerate

Taka/$

GasPrice(power)

change%

GasPrice(Power)

$/Mcf

GasPrice(Fertilizr)

Tk/Mcf

GasPrice(Power)

Tk/Mcfear



What to Do?

Gas Reserve Vs Production



Gas Reserve Vs Production(As of December 2007)

21.265

7.6918

5.4711

7.98 7.42

15.4035

0

5

10

15

20

25

Possible

Recoverable

Probable

Recoverable

Proven

Remaining

Product ion Prov en

Recoverable

Proven

G a si n

T

C F

> 9 0 %

4 0 - 8

0 %

<4 0 %

Current Reserve Categories –Supply Demand Balance



Current Reserve Categories –Supply Demand Balance

0

1000

2000

3000

4000

5000

6000

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

G a

s m m c f d

Proved Probable Possible Case B Demand

Shortfall would commence in 2011 against Proved ReservesShortfall would commence in 2011 against Proved Reserves

Ref: GSMP

2006

50 Bangladesh Floating on Gas!



0

5

10

15

20

25

30

35

40

45

PAST PRESENT FUTURE

G

a s i n T c f

Resources

Reserves

0.6 Tcf/year

Used up to 2007

7.4 Tcf

Bangladesh Floating on Gas!

13.4 tcf Remaing

32 tcf Potential(50%)

Expected Augmentation (short term)



Expected Augmentation (short term)

Based on Proven reserve and new drilling

175 MMscfd115 MMsfd165 MMscfd

(85 Wkover +80 Cap addn)

2010-112009-102008-09

Production AugmentationProduction Augmentation



Production AugmentationProduction Augmentation

Activ ities (Long term) Activ ities (Long term)

Cairn

Total EP& JV

Cairn-Chevron

Company

200Nov ’08 – June

‘12

Exploration in Block # 5 ,7,10

100Nov ’08

– June ‘12

Exploration Dril ling of Magnama &

Hatiya Structure

300 - 5002009-2016

Bangladesh Offshore Bidding Round 2008

50 - 100Nov ’08 – June

‘12

Exploration in Block # 17 & 18(3-D Seismic followed by explorationdril l ing)

Production

MMSCFD

PeriodPrograms

Transmission Projects under Implementation



30”x235k m

ADBDec 2011 Ashuganj-BKB-CTG Trans. Pipeline

(under active consideration of ADB)

30”x60kmWBJune 2010Bakhrabad – Siddirganj

24”x14km ADB/GOBJune 2010Pipeline from Titas field to A-Bpipeline

20”x165k m

ADBJune 2011 Bheramara-Khulna Pipeline

SizeFunded ByCompletionTime

Projects

12”x51km ADBJune 2009 Bonpara-Rajshahi Pipeline

30”x87km ADBJune 2010 Hatikamrul-Ishwardi-BheramaraPipeline

10000 hp ADBJune 2011 Elenga Compressor

Expansion to West Zone

BB Corridor Expansion

30”x51km ADBJune 2009Monohordi-JMB East Loopline

18000 hp ADBDec 2011 Ashuganj Compressor Station

12000 hp ADBDec 2011 Muchai Compressor Station

North-South System Expansion



CT Gov Measures 3D Seismic of 5 major PB gas fields to be completed

by 2011 may add 5 tcf of probable reserve to thesystem

With gas price increase, at least 1 tcf of thin bedreserve within PB fields will be commercially viable

BAPEX was granted $0.5 billion to be self supportingin seven years (highest in Bangladesh history)

Launched 3rd round offshore bidding

Actively pursued to vacate the onshore explorationmoratorium imposed by the high court Tried to resolve all disputes with the IOCs Tried to formulate coal policy



Power

The key to power is available anddiverse primary energy

Generally, funding and managementcan resolve power problem

POWER INDICATORS



POWER INDICATORS

137 kWhPER CAPITA CONSUMPTION

1 : 5 : 3.5 :2.5BD:IND:PAK:SL

4500 MWSUMMER PEAK DEMAND

700-900 MWPOWER SHORTAGE

3600-3800MW

PEAK GENERATION

40% ACCESS TO ELECTRICITY

STATUSINDICATORS



PRESENT POWER SITUATION

GENERATION CAPACITY

361247625232TOTAL

135214541454IPP

226033083778PUBLIC

MWMWMW

AVAILABLECAPACITY

(AS ON 08 APR 08)

DE-RATEDCAPACITY

INSTALLEDCAPACITY

TYPE

Maximum generation in history - 4130 MW



Fuel Mix of Power generation



Facts 2000 power sector master plan forecasted 5000 MW peak

demand for 2007 Only 80 MW power was added during 2001-2006 period

Presently 400-500 MW stranded capacity due to gas supplylimitation

300-400 MW F/S and maintenance 150-180 MW short in Kaptai due to water shortage Why gas shortage now?

It was always there. It has been exposed now due to power plantavailability by last year’s maintenance and management effort

Rapid decline of Sangu field Better performing fertilizer sector Unusual growth in CNG and captive power gas demand in a very

short span (2006-07)



Better but Not Good Enough(generation)

12033763256June

8134123331May

24036173376 April

66037733113March

81035032693FebruaryDiff (MW) 2008 (MW) 2007 (MW)



Measures by the CT Gov Through maintenance and Rehab, added 600 MW in

2007-08 Capacity addition in 2007-09

Plants commissioned 422 MW New Contracts signed 1100 MW Contracts in process 1400 MW

(Based on time bound (2008-2011) gas guarantee with someuncertainty)

NO MORE gas based power plants from existing

reserve Demand management

Efficiency – promoting CFL Conservation – Low usage Time shifting – Holiday staggering, Shopping hour Lifestyle motivation – Media campaign

S ( / i i )



System Loss (w/o transmission)

14.53

20.53

13.44

12.39

16.58

2006-07

%

13.0813.4WZPDCo

18.5819.03DESA

10.9210.62DESCO

14.314.07REB

14.5414.72PDB

Up to Apr’08 %

2007-08

%

Distn Cos.

Revenue increased by 1300 crore in 2007 over 2006(Average system loss reduction of 2%)



Other Measures by CTG Open merchant power generation for private

purchase (own fuel and market) Opening state gridlines for private use based on open

access rule Public-private partnership for all infrastructure

(mainly generation) Coal based power (coal policy to be approved) Renewable energy policy

Conservation act (in progress) Gas act (waiting final cabinet approval) Nuclear power



Way Forward

Power Sector Master Plan



Power Sector Master Plan

• Base plan for growth from 22,000 GWH to 100,000 GWH by 2025 calls for an additional 17,700megawatt (MW) of generating capacity to be installed by 2025. Will require significantinvestments, likely billions of dollars.

Current :~22000 GWH

Target 100,000GWH by 2025

Go Coal for Power Generation!R i B l d h



Reserves in Bangladesh

3906.68119-506Barapukuria,Dinajpur(1985) 1.

57230.00150-240Phulbari,Dinajpur(1997)

3.

143(GSB),685(Hosaf)

12.00257-483Khalaspir,Rangpur(1995)

2.

1,05016.00900-1000Jamalganj,Jaipur(1965) 4.

200

(partly

evaluated)

Yet to beKnown

327Dighirpar,Dinajpur(1995)

5.

No.

Total

Place/Field(Discovery)

2,897

Proven Reserve(Mill ion Ton)

Area(Sq. Km)

Depth(Meter)

A Probable Coal Consumption Scenario



A Probable Coal Consumption Scenario

1000 mill ion tons (1 bil l ion ton) 2014 1000 MW 3 m t

2015 1000 MW 2000 MW 6 m t 2016 1000 MW 3000 MW 9 m t

2017 1000 MW 4000 MW 12 m t

2018 1000 MW 5000 MW 15 m t

2019 1000 MW 6000 MW 18 m t 2020 1000 MW 7000 MW 21 m t

2021 1500 MW 8500 MW 25 m t

2022 1500 MW 10000 MW 30 m t

2023 1500 MW 11500 MW 35 m t 2024 1500 MW 13000 MW 39 m t

2025 1500 MW 14500 MW 43 m t

2026 1500 MW 16000 MW 48 m t

2027 2000 MW 18000 MW 54 m t 2028 2000 MW 20000 MW 60 m t 418 mill tons

COAL – Electricity Generation



COAL Electricity GenerationA COAL USE SCENARIO FOR BANGLADESH

0

10

20

30

40

50

60

70

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

YEAR

M I L L I O N

T O N S



Twenty Year Energy Security Find new gas, enhance existing production

Release maximum gas from power production usingcoal fired generation

Prioritize gas use for industry, CNG and fertilizer

Promote LPG for cooking Promote renewables, especially bio-gas and solar for

rural areas Immediate adjustment of all energy prices based on

ANY rational formula Reform of organizational and commercial framework

of energy business

Bottom Line!



Bottom Line!

Energy Security doesn’t come in a separate package!

So I f w e c an ’t m anage our economy, affordability cannotdictate reliable availability

Power & Energy _Presentation_M Tamim

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