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BBA Discussion Forum / Re: Business News
« on: July 14, 2011, 07:54:34 AM »Few gas connections amid a long queue
Thursday July 14 2011The government has just started giving gas connections to new industries that were waiting for the last two years. This is otherwise considered a positive development against the backdrop of the country's slow pace of industrialisation.
A report published in a national daily this week suggested that the authorities were now giving gas connections to a limited number of new industries based in and around Dhaka city. This is being done following a decision taken last month at a meeting of a government committee headed by the prime minister's adviser on energy and power.
Only 40 such industries out of hundreds of applications filed two years back and beyond, will get the much-sought-after connections initially. Ban on providing connections to new industries became effective in 2009 following severe gas supply constraint.
It is now evident that hundreds of entrepreneurs had deposited money with the treasury a couple of years back for getting connections according to Titas' advice. But the government imposed restrictions on providing gas connections to industrial units as well as households soon after that. Since then they were waiting for the connections.
There are allegations of nepotism and favouritism about Titas in giving gas connections. According to the report, a number of entrepreneurs have been failing to get gas connections although their names were on the list of 40 approved ones.
By-passing them, Titas is reportedly giving connections to late comers through underhand deals. Most of the entrepreneurs have put millions of dollars in investment for the industries.
However, Titas said the industries that applied for gas connections in 2008 and installed pipelines have been included in the latest list. Some entrepreneurs have reportedly filed writ petitions against Titas for breach of commitment. They had made payments to Titas in 2009 for gas connections. If Titas accepts money, it is obligated to give connections, they contended.
While the gas supply crunch still lingers, thousands of new connection seekers have illegally obtained it bypassing the government restriction on the same since long. The situation reached such an extent that the housewives in the metropolis are struggling to cook daily meals, CNG fuelling stations are failing to supply adequate gas, and all types of industries are starving for gas supply.
Besides, low gas pressure is affecting electricity generation in power plants across the country. According to reports, such a scenario is visible in most of the places in Bangladesh. As a consequence, life-span of the gas-based power plants is also shrinking and their equipment are being damaged. Although the plants are set to generate electricity in their full capacity, the low gas pressure is holding back their operations.
Delay in implementation of the 30-inch diameter and Monohardi-Jamuna gas pipeline is also causing low gas pressure problem in Savar and its adjoining areas. The pipeline project work has long been stalled.
Gas supply crunch, along with low pressure, has been affecting the pace of industrial growth in the country. It has also led to the closure of several power plants and industries. Over the past decade, there have been no major efforts to explore and exploit the country's gas resource, in spite of the fact that the country's economy is predominantly gas-based. On the other hand, exploiting very low tariff of natural gas, there had been mushroom growth of medium and large gas and energy consuming industries in and around Dhaka and Chittagong cities. This unbalanced growth of gas demand over-stripped supply and overwhelmed the security of supply in the gas grid.
Bangladesh would not have faced any gas crisis now if successive governments paid proper attention to capacity building and modernising the companies under Petrobangla instead of becoming over-dependent on foreign oil companies to produce gas. International oil companies (IOCs) with fewer gas reserves are producing much higher volume of gas because they have installed bigger production wells. They have done so because they have detailed information about their gas fields. In contrast, the wells of the big national companies are old and much narrower. They never modernised their gas fields to increase production capacity, neither did they try to gather detailed information about the gas fields' health.
Present inadequate gas production is the result of unplanned development of gas resource over the years. Then again the market expanded injudiciously without considering production and transmission constraints. Successive governments failed to carry out regular on-stream pigging of major transmission pipelines causing impediment to capacity utilisation of transmission system. State-run gas companies moved to transport higher than designed capacity through saturated transmission system causing significant pressure drop over the entire gas system. Irrational gas connections were given without assessing supply capacity and finally, the government failed to set up gas pipeline compressors in time.
Energy experts believe Bangladesh's ongoing gas crisis can partly be solved by increasing production from its existing gas fields. But for that matter, the country needs to quickly install adequate pipelines. There is no denying that the gas crisis has been created due to insufficient investment in the past. In dealing with the crisis over the next few years, the country should make the most of the reserves of the known fields, and get more through the pressure-constrained infrastructure by installing compressors.
The situation thus demands that the government takes up short- and medium-term measures to boost gas production and its exploration. Extensive drive should be carried out to disconnect unauthorised gas connections. Adequate setting up of pipeline compressors is expected to ease the problem to some extent.
http://www.thefinancialexpress-bd.com/more.php?news_id=142791&date=2011-07-14