It is easy to dream, but translating it into reality is undoubtedly very difficult. If the dream aims at achieving some targets, it presents huge challenge. Taking Bangladesh to the level of a developed country by 2041 is one such dream. Besides meeting various conditions, driving the economy to a desired destination is the main challenge. One of the major inputs for this is energy supply. The energy demand grew at an annual average of 8% per annum from 2000 to 2012. Own natural gas contributed for 70% of this growth. Natural gas is the dominating fuel for energy and power in Bangladesh. The proven recoverable reserve of natural gas is fast depleting. Bangladesh is heading towards becoming an imported fuel dependent economy due to a political decision -- “not exploiting own coal resource now”. Many countries have reached the level of developed economy through exclusive reliance on imported energy. Drawing those examples, the policy makers are saying that why Bangladesh cannot do that? But critics apprehend that Bangladesh does not have similar geographical and geomorphological advantages like those countries. Though not exactly similar, Matarbari-Maheshkhali islands have some enabling situation with 10-20 meters of draft in the coastal region close to the shore is prevailing there. These make the region ideal for a deep seaport apart from using the same for setting up import infrastructure for the coal and LNG.
The coastal region of Bangladesh delta has shallow draft as the delta is formed of sediments carried by rivers flowing from the upstream. Chittagong port has 9-meter and Mongla only 4.5-meter all season draft. Consequently, these two operational ports are not suitable for importing primary fuel like coal and LNG. The new Payra port under development also would not have required draft. A JICA survey states: “Anti-clockwise rotation of water by cyclone storm causes sedimentary material forms in south-westerly direction.” Consequently, there is little opportunity for getting required draft in the south western parts of the coastal region. Available information suggests that there is opportunity for getting 10-20 meters draft into the sea but it would be 100-km away from the Mongla port. From the under construction Payra port, the distance of deep sea having 15-20-meter draft would be about 35-km. In the southern Chittagong region, especially in Matarbari-Maheshkhali region, 10-20 meter draft deep sea would be pretty adjacent. That is why JICA in its ‘Big-B’ survey report suggested for setting up imported fuel infrastructure and deep sea port in that region and advised phase-wise implementation until 2041.
Fuel Import: Some Global Experience
United States of America, the largest fuel importer, enjoys strategic geographic advantage. It can easily access the huge surplus fuel availability of Canada importing gas through trans-border pipelines and hydropower through power transmission grid connectivity. Beyond this, USA import primary fuel from other countries as well. For Shell gas and oil bubble significantly reducing its importing and its strategy for reducing coal use, USA is set to become one of the top LNG and coal exporting country soon.
Japan is the largest fuel importer in Asia. The entire country has costal region having 18 meter plus draft. It has no issue importing coal using Capesize or Panamax vessels. They do not need transhipment of coal through ligtherage. For LNG import they have set up land based terminals near the shore. Other two major importing countries South Korea and Taiwan also have deep sea near their shore. For these adavantages they can comfortably import fuel and meet the entire demand of domestic industry. But situation is very different for Bangladesh. The importers cannot even bring 3,000 tonnes LPG carrying vessels near Mongla port. For fuel import, the larger vessel you use the lesser is the transportation cost. In a very restricted deep draft coastal facility of Bangladesh, Matarbari-Maheshkhali is a unique location.
Fuel Supply and Power Generation Plan
Bangladesh is now using 1 TCF gas per annum. From 2000 till last year, over 8 TCF from proven gas reserve has been consumed. Over this period only 1 TCF new reserve could be added. State Minister for Energy, Power and Mineral Resources Nasrul Hamid said the entire proven gas reserve will be completely exhausted by 2031 if no new large gas field is discovered soon. National ENP Company BAPEX has started working on a plan for 53 exploration wells in the onshore areas. If successful in 10 years, these may provide 3 TCF of new gas. Three IOCs are working in the 5 offshore blocks in the Bay of Bengal under PSC. The government is working on leasing out all offshore blocks of the Bay of Bengal (shallow and deep water) to IOCs by 2021. Petrobangla is optimistic about discovering at least 7 TCF of new gas from these prospects in 10-12 years. Even if these expectations lead to adding 10 TCF of new gas by 2041, Bangladesh would have to rely on imported LNG for meeting 75% of its gas demand.
One of main own fuel option of Bangladesh is high heating value, low sulphur, low ash coal. Five discovered coal fields have 3.3 billion tonnes of reserve. Experts observe that planned exploitation can extract at least 2 billion tonnes from these discovered fields. These can fuel 10,000 MW power generation for 60 years. But now the lone Barapukuria coal mine using underground mining method is somehow limping. It is supplying coal to a mine mouth 250 MW power plant. Another new unit of125 MW is being constructed there. The present production cost U$$130/tonne is higher than imported coal. But the political decision of not mining own coal in the near future has pushed the country to almost exclusive dependency on imported coal. It would not be out of place mentioning that imported coal will cause at least 25% more generation cost than using the own coal.
The draft PSMP 2016 prepared by JICA estimates a gas demand of 5,800 MMCFD by 2039. Of those, 1,800 MMCFD may come from expected new discoveries. The remaining requirement would need to be met through importing 4,000 MMCFD (28 Million Tonne) LNG. BERC Member Engr. Mizanur Rahman when asked whether Bangladesh can absorb almost exclusive reliance on imported fuel, he spoke about having no other options. He found no risks if enabling infrastructure and fuel import contacts are concluded for an effective fuel supply chain in the meantime. BUET Prof Dr M Tamim observed that failure in exploiting own coal resource has driven Bangladesh to almost exclusively dependent on imported fuel. According to him, Bangladesh would become 92% imported fuel dependent by 2030 if it continues to keep its coal resource buried underground.
PSMP2016 and Fuel for Power Generation
The PSMP 2016, which is now waiting for the government approval, provides for 57,000 MW generation capacity by 2041 -- 35% of that capacity would come from own gas and imported LNG and another 35% (almost exclusively on imported coal) from coal. The reaming 30% would be contributed by Nuclear Power, import from regional countries and liquid fuel. But questions have been raised for various initiatives for new power plants outside the scope of PSMP 2016.
A 1,320 MW coal based power project has been taken up at Pekua, which is not included in PSMP. A coal-based plant has been adopted for setting up at Gazaria while an initiative for setting up a third coal fired plant has also been taken at Payera which is outside PSMP. Approval has also been given for 750 MW gas-based power plant of Indian Conglomerate Reliance Group. Fuel import plan is also being adjusted with these projects. Experts cautioned that these may create situation for over investment in the power sector. These may cause exceeding power generation target that of 57,000 MW that PSMP 2016 suggested by 2041.
Fuel Import Infrastructure in Coastal Areas
Two imported coal-based projects each having 1,320 MW capacity are now advancing in the Southern region of Bangladesh at Rampal Bagerhat and Payra in Patuakhali. Of these, the Rampal power plant is scheduled to come into commercial operation in 2022. As per preliminary plan, coal for this plant would be transhipped from mother vessels anchored in deep sea and transported by smaller vessels to coal terminal of the plant. Another coal based plant of a private sector did not get approval due to coal transportation complexities. The government has also decided not to go for the second unit at Rampal. Transhipment of coal through lighterage would increase cost of generation.
The state-owned North Western Power Generation Company Ltd (NWPGCL), by forming a joint venture with CMC China, is advancing the 1,320 MW coal based plant at Payra with the ultimate objective of generation of 2,640 MW there. Another public sector company is also working on a 1,320 MW capacity coal based plant there. NWPGCL source informed that the first unit may start operation in 2020. If Matarbari coal port is constructed by then, coal for Payra plant will be brought from there using ligherage vessels. Otherwise they would invest on infrastructure in deep sea transhipment facility.
There is a plan for developing a deep seaport at Payra as well. Initially a coal port was included in Payra power plant development. Later the responsibility has been given to the port authority. The deep seaport construction is a great challenge here in consideration of draft. The 10-15 meter draft is available at 35 km distance from the shore. Consequently, a huge investment would be required for bringing the deep sea closer to the shore through massive dredging operation. Beyond all these, Petrobangla is working on a 7 million tonne annual capacity land based LNG terminal at Payra.
There are few other planned power generation projects along the coastal areas from Chittagong to Cox’s bazar. Private sector company S Alam Group in a joint venture with a Chinese company is constructing a coal-fired plant at Bashkhali, Anowara. With a plan also to import 3.5 million tonnes of LNG by setting up FSRU there, the Reliance group of India has signed agreement with the government. They will set up power plant using the gas. BEXIMCO has given a proposal to the government for setting up a multipurpose port at Bashkhali. Using this facility, they want to import bulk LPG, LNG and liquid fuel. EGCB is advancing on a coal-fired 1,320MW coal-based power plant at Pekua in Cox’sbazar.
Works for engaging contractors for the first unit of Matarbari coal based power plant (1,200 MW) and a coal port under JICA financing by Coal Power Generation Company is at final stage. There is a plan for the second unit of 1,200 MW power plant there. Besides, a Singapore company SEMBCROPCorporation has also signed agreement for a 700 MW power plant at Matarbari.
Bangladesh Power Development Board (BPDB) has acquired 8,000 acres of land at Maheshkhali. Eight blocks have been identified for 8 imported coal based power plants there. Each will have 1,320 MW of generation capacity. The land blocks were also allocated for importing 7 million tonnes of LNG import infrastructure and 3,000 MW LNG based power generation plant there. Chinese Company HQC has started feasibility study for a land based LNG terminal under MOU with Petrobangla. Coal for the planned coal based power plants here would be supplied from Matarbari Coal Port (Coal Transhipment terminal)
Besides, BPC has started working on a Single Point Mooring (SPM) construction project not very far from Maheshkhali for importing liquid petroleum. Excelerate Energy has started working on FSRU terminal for supplying 3.5 tonnes imported LNG for Petrobangla. It is expected to start operation from March 2018. Bangladeshi company Summit Group will also set up a similar capacity FSRU there. Indian Company PETRONET is carrying out feasibility study for a 3.5 to 7-million tonne land based LNG terminal at Kutubdia. Petrobangla has also signed MOU with SEMBCROP for a 7 million tonnes capacity LNG terminal. Hong Kong Shanghai Manjala Power Plant has given a proposal to Petrobangla for setting up of a 3.5 tonnes annual capacity LNG terminal at Sangu valley.
DG Terminal, a Dipon Gas Subsidiary, has also tabled a proposal for a bulk LPG terminal including storage facility at Maheshkhali. There is also a plan for setting up of an Eight million tonne capacity crude oil refinery at Matarbari by 2041. Many other local and foreign companies are submitting unsolicited proposals to the government for investment in Chittagong and Cox’s Bazar coastal areas.
South Chittagong Development Plan and Matarbari-Maheshkhali
The BPDB had initiated a plan few years back to develop an energy hub at Matarbari-Maheshkhali. A German company was engaged as consultant. They submitted a final report taking into consideration the land use and infrastructure development plan. Following the recommendations, LNG import terminals, LNG based power plants and coal fired power plants development plan is being finalized. This plan has taken into consideration of the Southern section of North Maheshkhali. The plan includes provision for 8 (eight) 1,320 MW power plants with a total generation capacity of 10,560 MW in 8 blocks and 3,000 MW LNG based power plants. This means plans for generation of over 13,000 MW power in Mahekhali. Former BPDB senior executive and now working as a member of BERC Engr Mizanur Rahman was deeply involved with this planning. He told the EP that it would not be appropriate location for the power plants in the South Section of North Maheshkahli. He suggested pushing the power plants further north of North Maheshkhali. He suggested constructing the LNG based power plants near the growth centers instead of Maheshkhali. There would be no better option than Maheshkhali-Matarbari to develop a deep seaport, which will be very essential in future. LNG terminals and coal ports must be constructed in the south section of North Maheskhali as part of deep sea port. Director General of the Power Cell Engr. Mohammad Hossain opposing such views said under directive of the government Matarbari and Maheshkhali is being developed as energy hub. He is unaware of any government plan for deep sea port there.
Big B & JICA Feasibility Study
JICA completed a compressive study of South Chittagong development in 2015 considering the 2041 requirements of Bangladesh. The report suggested for developing Matarbari-Maheshkhali with the construction of deep seaport energy hub and related downstream industries. It stated of phase-wise construction of 1,200 MW coal based power with total capacity of 3,600 MW in the public sector at Matarbari. SEMBCROP would construct a 700 MW power plant there as IPP. On the other hand, the report included suggestions for 5 units of 1,320 MW of capacity each totalling 6,600 MW coal based power plants. It also included suggestions for 14 million tonnes/year LNG import infrastructure setting up inclusive of FSRU and land based terminals.
The proposed coal port according to the report was suggested to be a coal trans-shipment terminal (CTT). This would have annual handling capacity of 41 million tonnes. The capacity of this CCT as appeared in the report was 9 million tonnes in 2016, 26 million tonnes in 2031 and 41 million tonnes in 2041. Coal would be supplied from here to all the power plants of Matarbari and Maheskhali using conveyor belts. Coal to other power plants in different parts of the country can also be supplied from here through lighterage vessels. 70,000-80,000 tonne capacity Panamax vessels can berth and unload at this CTT. This will be a very sophisticated modern terminal. Coal storage yard and other facilities will also be there.
Industries will be set up in different blocks following JICA study report. Deep sea port with integrated planning would also be set at Matarbari Maheskhali beside the coal and LNG terminals for feeding these industries. The study report also has included land use plan of the two islands. The plan for crude oil import and refinery is also clearly spelled out in the study.
The JICA report states that 72% coal, 34% LNG and 78% petroleum products would come from import by 2026 through Matarbari-Maheshkhali. By 2041, the infrastructure of Maheshkhali and Matarbari alone would meet 85% coal, 51% LNG and 62% liquid fuel import requirement of Bangladesh. Some 23% of electricity demand of the country would be met from plants in Matarbari-Maheshkahli area. The report mentioned that the CTT will be operational 300 days every year. By 2030, the CTT would be able to handle 336 Panamax vessels. CTT will start with 50 hectares of land but eventually would be expanded to 150 Hectares.
One JICA study stated of US$ 58 billion investment by 2041 for power plants, LNG terminals (FSRU and Land Based) and CTT. This would come from governments financing, development partners and private sector investments. Public Private Partnership (PPP) has also been stressed upon in the study.
The Ministry of Power, Energy & Minreal Resource (MPEMR) is working on power plants, LNG terminal and coal port development for power generation and fuel supply at Matarbari and Maheshkhali following their own plan. Initially, the government has plan for 13,000 MW power generation in the region. But now the changed plan targets for generating 13,000 MW in Maheshkhali alone. Besides, there are plans for 3,100 MW at Matarbari, 1,320 MW at Pekua and 1,320 MW at Bashkhali. On the other hand, though the original plan was to import 14 million tonnes of LNG, but by now six MOUs have been concluded that would facilitate importing LNG double the plan.
Bangladesh would definitely need to have a deep seaport as a regional development hub. By the next decade the two existing ports, including the under development Payra, would seriously struggle managing the growing economic demand. The initiative to develop deep seaport at Sonadia has been stalled. Sonadia is very environment and echo sensitive. North Maheshkhali and Matarbari is the ideal alternative, according to experts, for its unique geographical location. Experts suggested developing Matarbari-Maheshkhali under integrated planning with a deep seaport and considering deep water LNG terminals and CTT as integral parts of the port. These would require more careful utilization of land there. Keeping land at sea face for the deep seaport, the reaming land should be optimally used for other installations. Matarbari-Maheshkhali would not be an energy hub, it will become an energy integrated deep seaport in the future. Sonadia - Maheshkhali south will be its buffer zone.
Develop Maheskhali into Energy Hub with Provision for Turning It Into Deep Sea Port
Prof Dr.M Tamim
Chairman, Petroleum Engineering Department, BUET
Despite having extensive coastal areas in Bangladesh, it is extremely difficult for constructing a deep sea port due to shallow draft. Sonadia, Maheshkhali and Matarbari have required draft. But construction of deep sea port has become uncertain now. Consequently, Maheshkhali can be the most ideal location for a deep sea port. In my opinion, taking the essential need for a deep sea port into priority consideration, the energy infrastructures at Maheskhlai should be planned under comprehensive resource management master planning. LNG terminal and coal terminal construction can be part of port construction. Initially these would be used for fuel import but eventually these would be integral part of deep sea port when it becomes operational.
On the other hand, now being heard the plans for 13,000-14,000 MW coal fired power plants and 3,000 MW LNG based power plants in Maheskhlai and Matarbari island. The plan must be freshly reviewed to see whether it is appropriate or not. The reasons behind location of imported coal based power plants in coastal areas away from growth centers are well understood, but the plan for locating LNG based power plants cannot be supported.
A new hub is in the process of development with Nepal, Bhutan, Bangladesh and eastern regions of India. There is no other option to developing a deep sea port for the hub. Bangladesh does not have wider choice of locations for this. Maheskhlai is one of them. There is no option but to use every piece of land there under a comprehensive planning.
Deep Sea Energy Hub Infrastructure to be Set Up in Maheskhali
Director General of Power Cell
Deep sea port is essential for future Bangladesh. Several studies are being conducted for one of the proposed location at Sonadia. On the other hand, Bangladesh needs importing primary fuel on the backdrop of own fuel shortage. From these considerations, initiatives have been taken for setting up energy hubs at Payera and Maheshkhali. Of these, a multipurpose energy hub, including deep sea energy import infrastructure, would be set up at Maheshkhali.
A comprehensive master plan is being finalised for Maheshkhali with far reaching objectives and coordinating all aspects. Under this, a similar master plan initiative has been taken for a coal port and coal fired power plants at Matarbari. That port would later be transformed into a coal transhipment terminal. From this terminal, coal would be transported to all power plants in the two islands through conveyor belts.
The proven reserve of own natural gas is fast depleting. Imported LNG would replace that. A major portion of the country’s gas demand would be met through importing LNG through some FSRU and land based terminals. In each of the 8 blocks at Matarbari, one 1320 MW capacity imported coal fired power plant would be constructed. Areas have been earmarked also for 3000MW capacity LNG based power plants. All these would turn Maheskhlai as an Energy hub of international standard in the future.