17th October 2020
Mortuza Ahmad Faruque

 The government is contemplating to expedite oil and gas exploration and development activities, and enhance gas production as well as discovery of new gas field, including in the south-eastern part of the country especially Bhola Island to meet the country’s growing demand for primary fuel. Meanwhile, Bapex has identified some prospects by conducting 3D seismic survey which are Bhola North, Illisha and Tabgi. Bapex discovered their first gas field at Shahbazpur in 1995 and second gas field at Bhola town in 2018 which is Bhola North. The task of production of natural gas is easier than finding it. Bhola Island has high probability of becoming another good source of natural gas followed by Sylhet and Brahmanbaria. Intensive exploration may turn Bhola into another gas-rich basin in Bangladesh.  

 

Bhola North

The Bhola North prospect was delineated on the basis of interpretation of acquired 3D seismic data in 2015. It is a combination of structural and stratigraphic trap. It is located in the north of Shahbazpur structure and 32 km away from Shahbazpur. At the end of 2017, an exploratory well has been drilled at Bhola North structure. Bapex engaged Gazprom as a drilling contractor and drilled upto 3,520 m with commercial discovery of gas. The discovery in Bhola increases the possibility of finding more gas fields in the Island. Reserve estimation has been carried out for Bhola North in 2018 by BAPEX. The GIIP (Proven+ Probable) is 621.9 Bcf and recoverable will be 435.3 Bcf considering gas recovery factor 70%.

 

Proposed Drilling by Gazprom

Gazprom submitted proposal as a drilling contractor for drilling of an appraisal-cum-development well at Bhola North 2, one exploratory well at Illisha 1 and one at Tabgi in Bhola Island. The proposal is in the process of approval by the government. The total cost of the drilling is about Tk 650.0 crore, including foreign currency of US$ 66.35 million. The project financing will be from Gas Development Fund (GDF). Bapex could do this work within US$ 25-30 million. However, considering to develop better relation with the Russian Federation, our government might consider engaging Gazprom for the drilling. Under these circumstances, the government may provide loan to Bapex from GDF against this project on grant basis for the greater interest of Bapex. Otherwise, Bapex will be in the deep trouble to pay back loan and the employees of Bapex will be very much upset and demoralized.

 

There are other ways to engage Gazprom where technical capacity of Bapex is limited such as to explore some identified structure at Chittagong Hill Tracts, drill some prospective dry and abandoned wells, ultra-deep drilling at Titas, Fenchuganj, Kailashtila, Sunetro and Mubarakpur etc. Besides, Gazprom may carry out exploration work in the non-explored area like Char Fasson, Char Jabbar, Char Mantaz in Bhola Island and adjacent areas, different coastal areas, Khaliajuri prospect in Sunamganj etc. by doing JV with Bapex and keeping provision to carry out 2D and 3D seismic surveys and drilling by Bapex and utilizing their services like mud logging, cementation, testing (surface) operation and different lab test using laboratory of Bapex.

 

Bhola North 2

The proposed drilling of Illisha exploratory well 1 is approx. 3.5 km north-east from Bhola North well 1. The estimated resource of Bhola North 2 is around 600 Bcf which needs to be confirmed by drilling. The target drilling depth is around 3,450 m. It is expected that the drilling of Bhola North 2 will be completed within June 2021.

 

Illisha 1

The proposed drilling of Illisha exploratory well 1 is approx. 5 km north-east from Bhola North well 1. The type of trap is stratigraphic. The estimated resource of Illisha is around 180 Bcf which will be confirmed by drilling. The target drilling depth is 3,400 m which might be completed within 2021.

 

Tabgi 1  

The drilling of Tabgi exploratory well 1 has been considered by Bapex to prove hydrocarbon potentiality at Tabgi prospect. The type of trap is structural. The proposed Tabgi well 1 is located about 3.12 km south east of existing Shahbazpur Well l. The estimated resource of Tabgi is around 600 Bcf which will be confirmed by drilling. The target drilling depth is about 3,450 m.

 

Shahbazpur

The presence of gas in the Shahbazpur structure has been confirmed through 2D seismic survey and drilling of Shahbazpur well 1 by Bapex in 1995. After discovery, three development wells including one appraisal well i.e. Shahbazpur East 1 have been drilled in this structure so far to increase gas production. In 2014, 3D seismic survey had been carried out by Bapex. Meanwhile, on the basis of 3D seismic, Bapex drilled an appraisal well by engaging Gazprom which is Shahbazpur East 1 and found gas. Shahbazpur structure has an area of 75.05 sq.km and Shahbazpur East 1 is an extension of Shahbazpur structure. Drilling of Shahbazpur East 1 has been completed in November 2017 but not yet in production due to lack of gas market.

Bapex re-evaluated the gas reserves of Shahbazpur, including Shahbazpur East, in 2019. There are five distinct gas zones identified in this field and the total GIIP (Proven+Probable) is 918.12 Bcf and its recoverable reserves stands at 642.68 Bcf considering recovery factor 70%. Apart from this, 573 Bcf of gas has been considered as possible reserve. The recovery could be increased to 85% and more if wellhead gas compressor can be used during depletion of gas and when well head gas pressure will be going down to less than 1000 psi and upto 150 psi.

 

Updated reserves and resource estimation by Bapex for Shahbazpur Gas Field including East, Bhola North Gas Field, Illisha and Tabgi Prospects in Bhola Island are as follows as table: 1

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 The reserve base of Shahbazpur including East, Bhola North, prospects of Illisha and Tabgi will be definitely increased by drilling a number of exploration, appraisal and development wells. Apart from this, Bapex has a future plan to carry out 2D/3D seismic survey in the southern part of Shahbazpur structure such as Char Fasson, Char Jabbar, Char Mantaz, Char Manpura, Subarna Char etc. On the basis of seismic survey and interpretation, number of exploration wells could be drilled in the future.

 

Gas production from Shahbazpur

Gas production from Shahbazpur field has been started from May 15, 2009 for supplying to a rental power plant of Venture Energy at Bhola town. On many occasions, the plant remained shut down and gas production had to suspend accordingly. The gas supply from Shahbazpur field is limited within Bhola island. The annualized daily average gas production ranges between 3.6 MMCF and 55.9 MMCF since inception and the total cumulative gas production from Shahbazpur is 88.9 Bcf only up to September 2020.

/userfiles/Table-2 Cover Article.jpg


Some appraisal and developmentwells need to be drilledin the future at Bhola North well 3 & 4, Shahbazpur well 6, 7, 8 & 9 depending on gas demand inBhola and construction of Bhola-Barishal-Khulna gas transmission pipeline or to increase electricity transmission capacity from Bhola. 


Existing Power Plants in Bhola

Presently there are three operational power plants in Bhola Island which are: i) 34.5 MW rental power plant, operated by Venture Energy at Bhola town since 2009, ii) 225 MW power plant owned and operated by BPDB at Borhanuddin since 2015, iii) 95 MW power plant owned and operated by Aggreko International at Borhanuddin since March 2018 and iv) 220 MW NBBL`s duel fuel combined cycle power plant is expected to be commissioned at theend of this year at Borhanuddin.


Gas Demandof Bhola

The daily gas demand of power plant and other customers in Bhola is about 70 MMCF and consumption is around 50 MMCF. The three wells to be drilled by Gazprom under special act 2012, and to increase gas production in Bhola. But after drilling, gas production can`t be started due to lack of gas market in Bhola which will take about eight to ten years and wells will remainidle. The gas demand will be increased to 105 MMCF within this year through commissioning of 220 MW duel fuel combined cycle power plant by Nutan Bidyut (Bangladesh) Limited (NBBL), a subsidiary of Shapoorji Pallonji Group of India. They are also planning to add another 220 MW gas-based power plant by early 2025 depending on long term availability of gas. If it is finalized,then gas demand will be increased to 130 MMCF a day and meanwhile power plant of Venture Energy will be in the retirement phase. The present gas production capacity of Shahbazpur is about 85 to 90 MMCF and it will be increased to 120 MMCF by early 2023 after setting up 60 MMCF capacity of a new gas process plant at Shahbazpur and construction of 4km hook up line from Shahbazpur East to Shahbazpur.


Construction of Bhola-Barishal-Khulna Gas Transmission Pipeline

Gas Transmission Company Ltd. is planning for construction of 24 or 30 inches 60 km gas transmission pipeline from Bhola to Barisal. The project implementation period will be 5 years. The construction of Bhola - Barishal gas transmission pipeline would be technically very difficult due to number of wide river crossings. However, it will depend on construction of 9.22 km Bhola bridge over Kalabadar and Tentulia rivers. The construction period of this bridge will take at least 6 years. Apart fromthat, construction of 24 inches 120 km Barishal-Jhalokathi-Pirozpur-Bagerhat-Khulna gas transmission pipeline in the planning and survey stages.


ConstructionofBholaBridge

A Japanese company is likely to build Bhola bridge over Tentulia and Kalabadar river to connect island district Bhola with Barishal under a Public Private Partnership initiative. A proposal to build 9.22 km bridge and 3km of which would be over Sreepur Char by Miyagawa Construction Ltd. was placed before the Cabinet Committee on Economic Affairs last month for its approval in principle. The committee neither approved nor rejected the proposal. They sent back the proposal to clarify some points and the proposal is expectedto getapproval in the next meeting. A feasibility study has been carried out by a team of Chinese consultants.The estimated cost of construction of Bhola bridge is about Tk 13,000 crore which is going to be the longest bridge in the country. The construction of Bhola bridge may start by July 2021 and complete within December 2027.


Observations

Bapex has the technical capability and capacity to drill appraisal well at Bhola North-2 and exploration wells at Illisha and Tabgi prospects. But unfortunately, Bapex is not being used to develop their own gas field and to drill their identified prospects which were identified by conducting 3D. If Bapex drilled, it would have been cost-effective and institutionally encouraging. Gazprom is in the process of being engagedfor carrying out appraisal and exploration well in Bhola that will be substantially expensive.

There is a very high possibility of gas discovery at Tabgi because itis an extension of Shahbazpur structure and only 4.2 km from Shahbazpur well 1. If there is any discovery, another 25 to 30 MMCF gas a day to be added in the production capacity. It is very much clear that even if the second unit of power plant of NBBL`s comes, Shahbazpur including East and Tabgi can meet the gas demand of Bhola.

Bapexhas already taken a loan of more than Tk 3,000 crore from GDF for doing exploration and development works, purchasingrigs for drilling and work over etc., but it hasnotthecapacity to repaythe loan. Bapex needs another loan of Tk 650 crore from GDF against three drilling projects in Bhola.

The gas production capacity of Bhola North will be 50 to 55 MMCF a day after completion of drilling at Bhola North 2 and to set up a process plant at Bhola North. If there is any discovery at Illisha, another 15 to 20 MMCF of gas would be added in production capacity. But unfortunately, apotential gas market is yet to develop in Bhola. However, if we consider potential market in Barishal and Khulna, Bapex needs to wait till 2030 for taking gas production from their field in Bhola. So it is a reality that there is no immediate gas market after drilling of Bhola North 2 and Illisha. Naturally, question may come, is there any necessity to drill three wells under special act with high cost and by Gazprom? Apart fromthis, how Bapex can payback their loansfrom the GDF?

Recommendations

·    The government should provide GDF loan to Bapex against drilling of 3 wells by Gazprom in Bhola ongrant basis.


·    Gazprom may be engaged to explore some identified structures at Chittagong Hill Tracts, to drill some prospective dry and abandoned wells, ultra-deep drilling etc. which would be difficult to drill by Bapex.  Gazprom may carry out exploration work in the unexplored areas ofChar Fasson, Char Jabbar, Char Mantaz, Char Manpura, Subarna Char in Bhola Island and adjacent areas, different costal areas, Khaliajuri prospect in Sunamganj etc. by formingJV with Bapex.


·    If there is anyJV between Gazprom or any other company andBapex, it is very much necessary for keeping provision to carry out 2D/3D seismic surveys and drilling by Bapex. Apart fromthis, utilizationof Bapex services like mud logging, cementation, testing (surface) operation and different lab test using laboratory of Bapex also important.

 

Mortuza Ahmad Faruque, Energy Specialist and Former Managing Director of Bapex. email: [email protected]


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