Increasing Gas Production From Local Wells Can Reduce LNG Dependency

Increasing Gas Production From Local Wells Can Reduce LNG Dependency

Natural resource exploration, development, and workover initiatives have resulted in local gas-producing companies acquiring 55mmcf/d additional production capacity this year. The newly added capacity is equivalent to half of the country’s reliance on spot market LNG. As part of the efforts made by the Department of Energy and Mineral Resources to address the energy crisis, around 35mmcf/d gas has already been supplied to the national grid from this new capacity. Besides, 20mmcf/d is waiting to be delivered when it’s necessary. 

In the face of rapidly dwindling foreign exchange reserves and volatility in the global energy market, the government was forced to suspend the purchase of liquified natural gas from the international spot market in July this year. However, after several months of shortfall in both the industrial and residential sectors, this progress in supply is giving a glimmer of hope. 

An additional 217 million cubic feet of gas will be added to the national grid by 2023 from 15 wells per day, the Department of Energy and Mineral Resources said. Moreover, according to various sources, the Department of Energy and Mineral Resources is planning to produce 618 million cubic feet of additional gas by 2025 through exploration, development, and workover initiatives of 46 wells. 

Currently, the daily gas demand in Bangladesh is 3500mmcf. Against this, local gas production is 2700mmcf, whereas local gas production companies and international oil companies supply 2247mmcf. The rest of the 470mmcf of gas comes from imported LNG. Besides, the government met the demand for 100-130mmcf/d gas by purchasing from the international spot market, which is leaving a crunch on the country’s foreign reserves. Due to this, Petrobangla adopted an action plan to increase gas production from local gas friends by accelerating the workover of marginal wells and exploring new gas fields. 

Nazmul Ahsan, the chairman of Petrobangla said, “the short and long-term plans include workover and exploration of marginal gas wells. Petrobangla’s long-term goal is to explore, develop, and work over 46 wells across the country, Adding 618 million cubic feet of gas per day to the grid by 2025.”

Local gas exploration companies are drilling six wells with a target of 62mmcf this year. According to officials concerned, the moratorium on spot market purchases has accelerated the move. 

So far, five wells have been drilled, namely Tobgi-1, Sundalpur, Sylhet-8, Kailashtila-7, and Beanibazar-1. According to the document, the concerned authority will complete the exploration work of the Srikail-2 well in Comilla soon. 

Of the 55mmcf of gas, the wells located in Sylhet contribute the most. Mizanur Rahman, managing director of Sylhet Gas Field Limited(SGFL), said that they had produced 96mmcf of gas this year, which is an additional 30 mmcf of gas compared to 2021. However, they are expecting to add another 55mmcf of gas to the national grid next year. 

According to experts, Bangladesh could have avoided LNG import from the spot market if the gas field authority had accelerated production capacity through gas well workover and modern management initiatives. 

The suspension of LNG procurement led to frequent blackouts and severe gas shortages in the country’s industrial sector during July- September. 

The Kailashtila field in Sylhet is the largest of the 22 producing gas fields across the country; 2 trillion cubic feet of reserves are there. But the daily production of this gas field is only 32.8 million cubic feet, Whereas the Bibiana field, owned by US company Chevron, produces about 1133 million cubic feet of gas. But the reserve of that gas field is 763 billion cubic feet.

The production of Bangladesh Gas Fields Company Limited from Titas gas field is also relatively low. Their daily production is only 395 million cubic feet, while reserves are 1294 billion cubic feet.

SGFL’s other major gas field, Rashidpur, with reserves of 1700 billion cubic feet, has a daily production of only 43.5 million cubic feet.

Energy experts are calling for accelerating production to reduce the gas crisis in the country; On the other hand, the authorities are pointing toward the issue of well management.

In this regard, Petrobangla chairman Nazmul Ahsan said, the wells are very old, so it’s not possible to increase the production immediately. 

Mohammad Ali, managing director of BAPEX, said that the country developed gas fields with reasonable reserves like Kailashtila and Rashidpur in the 1960s. He also added, “If we want to increase daily production from fields like Chevron’s Bibiana, we need to redrill these wells.”

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