Gas connections to industries are to resume in the normal procedure, in a move to be finalized soon.
If the policy is done, the higher committee, charged with permitting gas connections, will be abolished. As a result, entrepreneurs will get gas connections within 7 to 10 days without any hassle, said an energy division official.
Welcoming the government initiatives, business leaders said, if the decision is implemented, the industrial sector will get additional momentum.
The energy division official said, the gas connections for industry is being limited on recommendation of the higher committee led by Prime Minister’s Energy advisor, Dr Tawfiq-e-Elahi, since the past four years.
“The energy division has made a new policy which has been submitted to the Prime Minister’s Office for final approval. It will be approved soon,” hoped the energy division official. Against the backdrop of an ever-increasing gas demand, the government decided to import LNG in 2010 to meet the country’s dire energy deficit.
On April 24 last year, a floating storage and regasification unit (FSRU) of Excelerate Energy Bangladesh brought the first shipment of 133,000 cubic meters of LNG from Qatar to Moheshkhali LNG terminal. It got connected to the subsea pipeline network on August 5 and commenced injecting the first regasified gas on August 18.
Sources said, currently, imported LNG is being supplied to the national grid at the rate of 450 mmcfd. The supply will reach 50 mmcfd in a very short time. Besides, 500 mmcfd more LNG will be added by this April. Then, new gas connections for industries will be reopened.
State Minister for Power, Energy and Mineral resources Nasrul Hamid said “it has now created suitable environment for investment in the industrial sector. The government has ensured uninterrupted power supply. Now we want to ensure uninterrupted gas supply to the industry. To this end, we want to make the procedure for gas connection easy. To do that, the entrepreneur must get gas connection within 7 to 10 days without any hassle.”
“The government has taken an initiative for a middle income country by 2021. To this end, expansion of industry is needed. And so, the government is more concentrated on simplifying the gas connections in this sector,” he added.
The government has imported LNG worth around taka 4500 crore since last August 18, and is selling the gas at taka 7.17 per unit, whereas its import price is around taka 32. As a result, it needs a subsidy of around taka 1500 crore.
An official said, imported LNG is very expensive. The government’s subsidy will increase as the LNG supply increases. So there must be a hike of gas price.
If the industrial gas users increase, subsidy will decrease. And as the entrepreneurs want uninterrupted supply of gas, they agree to buy gas at little higher price.
The government decided on limited gas connections in 2014 due to the country’s gas shortage. At the time, a committee was formed in this regard. One year later, Prime Minister Sheikh Hasina ordered new gas connection for industry, when she visited the ministry of Power, Energy and Mineral resources.
According to sources, captive power plant capacity is 2200 MW in various industries of the country. Around 300-400 mmcfd gas is needed for the power plants.
More than 700 applications are now pending for industrial gas connection in the energy division.
Energy Division sources said, gas demand in power generation and industrial units, including fertilizer production, is increasing gradually. On the other hand, the gas reserves in the country’s own fields are gradually depleting.
However, the government wants to meet the growing gas demand in the country through importing LNG and adding it to the national grid after regasification.
After the start of LNG import, the government decided to reopen gas connections of the compressed industrial factories. As a result, the applications for gas connection to gas distribution companies are increasing. The government has taken steps to give about two thousand industrial gas connections, applied for earlier.