Bangladesh is the seventh-largest producer of natural gas in Asia where gas supplies meet 56% of domestic energy demand. However, the country faces an acute energy crisis in meeting the demands of its vast and growing population. Bangladesh is a net importer of crude oil and petroleum products. The energy sector is dominated by state-owned companies, including Pertobangla and the Bangladesh Petroleum Corporation.
Bangladesh, with a very low reserve of petroleum, has become a net petroleum import country. Because of the recent liquid oil based power plants, petroleum requirements have increased by 28% in 2011. Because of the unrest in Middle-East region, petroleum price is going up which will increase import bill of Bangladesh Petroleum Corporation (BPC).
Aside from natural gas and petroleum, coal resource of the country is still underutilized because of lack of proper guideline. Coal policy, which will ensure proper guideline regarding the usage of this resource for the economic development of the country, is yet to be finalized.
Lack of investment in power generation in the last decade has created electricity shortage. With a view to combat this, the Government of Bangladesh (GOB) has taken initiative to set up power plants so that the country has sufficient electricity within 2016. Successful implementation of this is highly dependable on the supply of fuel. Over dependency on gas for electricity generation must be reduced, while coal and renewable energy based power plants must be introduced for sustainable electricity generation. Overall, in long term, an intelligent mix of the different available energy sources can enable Bangladesh to ensure a sustainable economic growth of the country. Right conditions and framework at policy and regulatory level is a must.
Energy Sector Structure of Bangladesh
According to the source of energy, we can represent the sector in the following structure:
Reserve of Natural Gas: 12.94 TCF of remaining recoverable reserve in Bangladesh.
Till now total number of discovered gas fields are twenty three (23). Reserved gas of these fields is consists of more than 96% methane and contains no sulfur. According to Petrobangla estimation, the country has 28.86 TCF of proven and probable natural gas reserve of which 20.98 TCF is recoverable. Cumulative production (December 2008) was 8.046 TCF making the remaining reserve of 12.937 TCF. At a consumption rate of 0.73 TCF annually, remaining recoverable reserve of gas was 11.48 TCF at the end of 2010.
Bangladesh Power Development Board (BPDB) with its generation subsidies contributes 59% of the total electricity generation while, private sector constitutes of Independent Power Producer (IPP), small independent power projects (SIPP) and Rental Power Plants (RPP) contributes the rest 41%. The cost of electricity up to consumer point is around Tk 5.50 per KWHr (unit).
Power Grid Company of Bangladesh, one of the subsidiaries of BPDB, has the sole responsibility to build up the national electricity grid for the uninterrupted transportation of electricity in a safe, reliable and economical way.
As on December 31, 2010, the company had 2,647.3 km of 230 kV and 5,788 km of 132 kV transmission line.
Dhaka Electric Supply Company (DESCO) is responsible for distribution of electricity in Mirpur and Gulshan area of the Metropolitan City of Dhaka. Dhaka Power Distribution Company Limited (DPDC) is responsible for distribution of electricity to southern part of the capital city of Dhaka and adjoining townships of Narayangonj and Tongi. Rural Electrification Board (REB) is responsible for distribution of electricity in rural areas through a system of co-operatives known as Palli Biddyut Samities (PBS). Other than the above, distribution subsidiaries of BPDB are responsible for electricity distribution in the specific areas those cover.
Bangladesh has low level of domestic reserves of petroleum along with insignificant production capacity. Relatively, high level of consumption has made it a net oil importer country.
- Industry organization
• Exploration, Production and Import
Exploration and production activities are primarily carried out by the Bangladesh Petroleum Exploration and Production Company (BAPEX). However, the country has also initiated several Production Sharing Contracts (PSCs) with foreign oil companies. Bangladesh Petroleum Corporation (BPC) is responsible for import of petroleum products.
• Refining and Blending
Under a Processing Agreement with BPC, Eastern Refinery Limited ERL processes crude oil imported by BPC and delivers the finished petroleum products to the other subsidiaries of BPC for marketing and distribution. Also, Eastern Lubricants Blenders Limited (ELBL) and Standard Asiatic Oil Company Limited (SAOCL) are responsible for blending of Lubricating Oils and greases on behalf of Petroleum Marketing Companies.
In the downstream, Padma Oil Company Limited (POCL), Jamuna Oil Company Limited (JOCL), Meghna Petroleum Limited (MPL) and LP Gas Limited (LPG) is participating in distribution activities of petroleum products.
According to Bangladesh’s National Energy Policy 2004, total coal reserves of coal are 2, 527 million tones of which major portion is deposited in Barapukuria, Phulbari, Jamalganj and Khalaspir fields.
Barapukuria Coal Mining Company Limited (BCMCL) is operating Barapukuria Coal Field and annual production from this field is one million tones annually. Asia Energy Corporation (Bangladesh) Proprietary Limited is developing Phulbari Coal Field. Other than these two, majority of Jamalganj and Khalaspir resources are in too deep to be mined.
- Overview of Power Sectors in Bangladesh