May 30, 2012
Bangladesh suggests gas-for-fertiliser exchange deal with Myanmar
The chairman of state-owned Petrobangla, Hussain Monsur, told Platts Tuesday (May 29) that Bangladesh is proposing a gas-for-fertiliser swap deal with neighbouring Myanmar, which will be on the agenda when Myanmar President Thein Sein visits Bangladesh next month.
Bangladesh wants to import natural gas from Myanmar to run the country''s gas-guzzling fertiliser plants and export the output back to Myanmar, where production capacity for fertiliser is limited, he said.
"We have talked with a top energy ministry official from Myanmar over the issue recently," said Monsur, adding that the response was positive.
"The gas import issue will be discussed further during the forthcoming visit of Myanmar''s reformist President Thein Sein in June," he said.
Further details on Sein''s visit or proposed gas import volumes are not clear. According to Monsur, Bangladesh first suggested importing natural gas from Myanmar for general "all-purpose" use in 2008. Myanmar, at the time, said it did not have sufficient gas for export, but would consider it in future.
Monsur said if the two countries agreed on the swap deal, Bangladesh would import gas via pipeline from Myanmar''s Rakhine state, where there are significant gas reserves, into Bangladesh''s port city of Chittagong, located about 200 kilometres away. According to media reports, Myanmar''s Rakhine state has two blocks, A-one and A-three, where there are estimated recoverable gas reserves of around eight trillion cubic feet (Tcf.)
Monsur said that such an import deal might help progress talks on the long-shelved tri-nation gas pipeline project involving Myanmar, Bangladesh and India. Negotiations on the US$1 billion pipeline project have remained stalled since the energy ministers of the three countries signed a memorandum of understanding in early 2005. The 290 kilometre-pipeline was initially designed to start from Rakhine in Myanmar and run to the Indian states of Mizoram and Tripura, before crossing into Chittagong in Bangladesh and back to Kolkata in India.
Bangladesh currently has nine producing fertiliser factories with a combined capacity of around two million tonnes/year but most of these plants are running far below capacity due to a gas shortage, a senior official with state regulator Bangladesh Chemical Industries Corporation told Platts Tuesday.
The fertiliser plants in Bangladesh currently get natural gas supply of around 80,000 million cubic feet/day (Mcf/d) under a government rationing programme, just over a quarter of total requirement of 290,000 Mcf/d, according to Petrobangla data as of May 28.
Meanwhile, despite having sufficient natural gas, Myanmar has limited fertiliser production capacity of around 100,000 tonnes/year against demand of over 1.5 million tonnes/year, a source familiar with the matter told Platts Tuesday, adding that fertiliser was among Myanmar''s key imports.
Currently, Bangladesh''s natural gas production is hovering at around 2.16 billion cubic feet/day (Bcf/d) against demand for over 2.50 Bcf/d, with the acute natural gas shortage hampering industrial output, electricity generation and the overall economy.
To meet the country''s growing natural gas demand, Bangladesh is planning to build a floating LNG terminal to import high-cost LNG. It has also recently sent proposals to authorities in Turkmenistan, Afghanistan, Pakistan and India, to be included in the TAPI gas pipeline project.