The regional relation between India and Bangladesh growing positive .Bangladesh has lifted its opposition to a gas pipeline linking India and Myanmar and running through its territory, paving the way for the establishment of a regional gas grid that will feed India’s growing energy hunger.

The approval by Bangladeshi Prime Minister Sheikh Hasina Wajed’s government comes as two other such pipeline projects involving India have become entangled in geopolitical knots.

Bangladesh’s change of stance follows the ouster of the Begum Khaleda Zia regime, which has been succeeded by an administration friendlier to India. The neighbouring nation had been stonewalling the 900km pipeline, which will originate in Myanmar and pass through Bangladesh to India.

The assent was communicated to India during power secretary H.S. Brahma’s visit to Bangladesh last month, which followed Sheikh Hasina’s state visit in January.

“The energy adviser to the prime minister of Bangladesh, Tawfiq-e-Elahi Chowdhury, communicated its (Bangladesh’s) willingness to be part of the pipeline project,” Brahma told Mint.

“We have to see what amount of gas reserves we are talking about. I am going to forward our report to MEA (ministry of external affairs),” he added.

Questions emailed to the embassy of Myanmar and Bangladesh’s high commission in New Delhi bounced back, while repeated attempts to contact the embassy and high commission yielded no results.

India has been seeking gas supplies from Myanmar and Bangladesh, both of which have significant reserves of the fuel.

Myanmar has gas reserves of 89.72 trillion cu. ft, of which 18.01 trillion cu. ft can be easily extracted. Bangladesh, on the other hand, has resisted calls until now for the export of natural gas—of which it has substantial reserves of 135.8 billion cu. m—to its larger neighbour, which needs supplies of the fuel for its projects.

India has recoverable natural gas reserves of 119.55 billion cu. m and produced 32,847 million cu. m in 2008-09.

“If the tri-nation pipeline happens, then there is a very strong possibility of the creation of a sub-regional gas grid,” said Anish De, chief executive at Mercados Asia, an energy consulting firm. “This is a huge statement and if carried out, will have massive social, political and economic ramifications.”

While India has been trying to get gas from blocks in Myanmar in which ONGC Videsh Ltd (OVL), the overseas arm of oil and gas explorer Oil and Natural Gas Corp. Ltd, and gas distributor GAIL (India) Ltd together hold a 30% stake, that country has decided to sell the fuel from the areas to China.

India’s cabinet committee on economic affairs in February approved the OVL and GAIL proposal to take stakes of 8.35% and 4.17%, respectively, in the pipeline being constructed by China National Petroleum Corp. (CNPC) to transport gas from the offshore blocks A-1 and A-3 to China.

This comes as Indian state-owned firms such as OVL are locked in fierce competition for energy assets with Chinese rivals including CNPC, Sinopec Corp. and China National Offshore Oil Corp. Ltd.

India was able to conclude several deals with Bangladesh and Myanmar in February.

State-owned NHPC Ltd signed an agreement with India’s ministry of external affairs last month to fund hydrological studies needed to develop the 1,200MW Tamanti hydroelectric power plant and a 642MW project on the Chindwin river, the largest tributary of the Irrawaddy, Myanmar’s key commercial waterway.

The Indian government last December also sanctioned a new 100km highway from Mizoram to the Myanmar border that would provide a road link to the Sittwe port in Myanmar that India is developing.

Bangladesh plans to set up two coal-fuelled power projects of 1,320MW each, one of which requiring an investment of around Rs6,600 crore will be offered to state-owned NTPC Ltd, India’s largest power generation utility, to be developed in a joint venture with the Bangladesh Power Development Board. NTPC is also scouting for renovation and modernization and operation and maintenance opportunities in Bangladesh. In addition, a 250MW transmission interconnection between India and Bangladesh is being set up by Power Grid Corp. of India Ltd.

nOW A DAYS Gas crisis is followed by the citizen. specialist is commenting that the CNG filling station is the reason.Power generation in Bangladesh is primarily from natural gas but not from coal due to enriched natural gas reserves in the eastern part of the nation. Coal deposits seem to be poor, and coal-fired plants must be relied on imported coal. From both technical and economical perspectives, to accelerate exploration and development of gas reserves in both onshore and offshore basins sounds more reasonable. Gas-fired power plants need gas for powering.

Analysis
Electricity shortage in Bangladesh has heavily influenced the economic growth. I had two trips to Dhaka recently and every time I experienced a few hours of darkness at the hotel. Fortunately this hotel has prepared a mini-power generator which can provide electricity at an emergency case.

Power generation in Bangladesh is primarily from gas-fired power plants. One exceptional coal-fired plant, to my knowledge, is the Barapukuria Power Plant in the northwest corner of the country, which was jointly constructed and operated by Chinese CMC (China Machinery Import and Export Company). Coal production in this country is very low, and in-situ power plant is limited. Domestic natural gas reserves have been believed to be adequate for both residential and industrial uses. Until recently, gas crisis in the capital city Dhaka has changed the story. Natural gas production starts declining, and gas shortage becomes an issue. Both government and congress realized the imperative needs of gas and coal for power, thus, at the very beginning of the new year, governmental delegations from Bangladesh started road shows in London and Singapore, to promote energy demands and investment opportunities.

From a technical perspective, Bangladesh shall be able to self-support with its natural gas reserves from offshore to onshore basins as geologists believe. However, lengthy administrative processing and politics have slowed the exploration and development of natural resources in the country. Even worse, some oil companies did not relinquish acreage without completing working obligation. No new reserves have been booked, and no new production was brought on stream. Thus people have to pay the price to suffer power shortage. It is reasonably believed to accelerate natural gas exploration to meet the demands of gas-fired plants seems to be more efficient than to use imported coal for coal-fired plants.

According to the recent visit of Bangladesh Prime Minister .A cross-border electricity grid will be constructed within two years, officials said Friday after a daylong meeting discussing the details of cooperation between India and Bangladesh.

They signed two MoUs on power generation and distribution, and agreed to install a 130km power grid.

The decisions were taken at the second meeting of the Bangladesh-India Joint Steering Committee on Power Sector which had been formed during Prime Minister Sheikh Hasina’s visit to Delhi last month.
Each of the units in the joint-venture power plant will have the capacity to generate 660MW of power using imported coal. National Thermal Power Corporation of India will carry out a feasibility study for the plant this month, and submit a report by July this year to the Bangladesh government while the timeline for finishing the project has been set between 36 and 48 months of issuing the work order.

Power secretary Abul Kalam Azad, who led the host team to the talks in Dhaka, said that the two countries had finalised the details on the grid, and reached a broad agreement on building a 1320MW coal-fired power plant.

The two-unit power plant (660MW each) will be based in Khulna and cost about $1.8 billion.

The connection will facilitate Bangladesh’s import of 250 megawatts, enough for Mymensingh zone (demand 200MW) or Sylhet zone (198MW) or Rangpur which burns 175MW.

The Indian power secretary, HS Brahma, said that his country was offering “the cheapest rates”– varying between Rs 2 and Rs 2.5 (Tk 3-3.5).

In Bangladesh, the household consumers currently pay about Tk 2.5 per kWh.

India’s National Thermal Power Cooperation (NTPC) and the Bangladesh Power Development Board (BPDB) signed the MoUs Friday night.

“The project requires 130km grid connectivity with 85km in India and 45km in Bangladesh,” Brahma said.

The two secretaries led the joint committee of officials, set up after the summit meeting in Delhi last month to thrash out the modalities of power cooperation.

The committee decided to call for tenders on Feb 28, and hopes to award a work order in July this year.

Experts say the project will take up to 24 months to be completed.

The goverment is serious to develop the power infrustucture of Bangladesh.Bangladesh is seeking $7 billion of foreign investment to boost its electricity generation, a shortage of which has slowed the country’s economic development, a government adviser said on Thursday.

“We invited foreign investors during a four-day road show in Singapore and New York as we need huge direct foreign investment to spur our economy,” said Tawfiq-e-Elahi Chowdhury, energy and power adviser to Prime Minister Sheikh Hasina.

The two-day show in Singapore was held from Jan. 25, followed by another in New York from Jan. 28.

“About 25 globally reputed companies like Morgan Stanley (MS.N), Siemens (SIEGn.DE), AES Corp (AES.N), ConocoPhillips (COP.N), Caterpillar (CAT.N) and HSBC (HSBA.L) participated in the road show and showed keenness to invest in Bangladesh,” Tawfiq told a news conference.

Bangladesh also held a similar show last month in London.

Due to technical constraints and shortfalls of natural gas supply, Bangladesh can produce only around a maximum of 3,700 MW of electricity while peak hour demand reaches more than 5,500 MW, officials said.

Electricity demand has been growing by 7.50 percent annually since 1990.

Around 40 percent of Bangladesh’s 150 million population has access to electricity, one of the lowest levels in the world.

“Augmenting electricity generation is a key priority of the present government and we are committed to generate 5,000 MW by 2011, and 7,000 MW by 2013 and that will require an investment of $7 billion,” Tawfiq told reporters.

The government will float a pre-qualification international tender this month to set up four natural gas or diesel fired power plants with total capacity of 800 MW, he said.

He said another pre-qualification international tender would be floated in July this year for four coal-fired plants.

Tawfiq said foreign experts would visit Bangladesh in March to discuss liquefied natural gas (LNG) imports.

“We feel that it would not be difficult as the private sector investors both at home and abroad, along with our development partners including the World Bank and Asian Development Bank, expressed desire to play a major role in this, while the government will play the role of the catalyst,” he said.

Bangladesh also plans to import up to 1,200 MW of electricity from India by the middle of 2012.

Continuous eletricity/energy supply  can ensure a real development -Bangladesh is trying to attract foreign investors to a string of major energy infrastructure projects, aiming to narrow a widening energy deficit, but it could be a hard sell.

It is offering, in Singapore, London and New York roadshows, a range of sweeteners, including 15-year tax breaks and sovereign guarantees on payments to attract up $10 billion worth of foreign money over the next seven years.

But with the flood-prone country among those most affected by climate change, Bangladesh’s volatile political history, the lingering effects of the global credit crunch and competing investment needs from giant neighbors India and China, investors may be hard to find.

It has previously been successful in roping in international majors like Chevron Corp. (CVX) and ConocoPhillips (COP) into its oil and gas sector.

By 2017, it plans to add about 1,000 megawatts of generation capacity annually and related infrastructure to tackle a power deficit that’s burgeoning even though just half of its 150 million-strong population is connected to the grid.

It hopes to attract funds to build half a dozen conventional power plants, an LNG import terminal and several solar and wind energy projects.

“In terms of power generation, we want to stay ahead of the curve so that we lead economic growth, instead of dragging it from behind,” Tawfiq-e-Elahi Chowdhury, energy advisor to the prime minister, told Dow Jones Newswires Monday.

Bangladesh officials, speaking at the Singapore roadshow, said the country had proven to be investor-friendly even in turbulent times of political instability.

Several potential investors at the event acknowledged the country had a fairly good track record for foreign companies, but added that Bangladesh needed to do more to improve the local infrastructure and cut red tape.

In the new drive, investors must arrange all the equity and debt financing, and organize fuel supplies, with the government for its part providing land, expedited licensing procedures and assisting in arranging funds or fuel agreements.

“We think the best way to go is to give the freedom to the operator to work his supply chain and funding and assure him a good rate of return on his investment,” he said.

The government plans to arrange a bidding process for all the projects this year, Chowdhury said, “to show investors that we are serious and very committed.”

Its next event will be in New York on Jan. 28-29.

Bangladesh has a relative good record on carbon emissions due to around 84% of its electricity being produced from domestically produced natural gas.

But with its gas reserves dwindling, the new projects, which mark a determination to develop the renewables sector, will also involve burning much larger amounts of imported coal and fuel oil than is now the case.

But gas will remain central to the energy mix, which is why a 3.5-million-ton LNG import terminal is also on offer. A government delegation will soon visit Qatar to start negotiations for LNG supplies, he said.

The government also plans to harness locally available cash to fund power generating and distribution networks, he said.

Talks are being held with the central bank to relax some statutory liquidity requirements for financial institutions so that huge amounts of idle money could be used to finance energy projects, he said.

Also, a Power and Energy Fund to utilize dollar remittances and government funds to leverage additional money into energy investments is to be set up, he said.

Bangladesh has not sufficient amount of power for meeting demand.So, sometimes for meeting this demand it needs to depend on the other countries.

India will trade at least 500 megawatts of electricity to Bangladesh under an accord that Dhaka will sign with New Delhi during the prime minister’s tour to the Indian capital next month, officials said Saturday.

Power Development Board(PDB) chairman ASM Alamgir Kabir told, “the authorities are giving final touches to a plan to import the power by mid-2012 to meet the country’s soaring demand for energy. “

A memorandum of understanding incorporating the plan is going to be signed between Bangladesh and India when Sheikh Hasina will make her first visit to New Delhi in her second term as the premier.

“Initially we’ll buy at least 500 mw of electricity. It will cost us around US$200 million to bring the power across the border,” Mr. Kabir said, adding the import could double within the possession of the government.

The PDB will make the purchase while the Power Grid Company of Bangladesh (PGCB) and the Power Grid Corporation of India (PGCI) will jointly set up transmission lines to carry the power to the Bangladeshi grid.

The PGCB would get wheeling charges from the PDB for bringing the power from the Indian national grid, PGCB managing director Ruhul Amin told.

The charge would be fixed based on the quantity of electricity to be traded and the distances to the user ends, he said.

A six-member technical committee comprising top officials of the PGCB and the PGCI has already been constituted to determine how the power would be transmitted from the neighbouring Indian states, said the PGCB chief.

Several modes of funding options are now being considered to meet the $200 million investments required for establishing the electricity grid connections between the two South Asian nations, said a senior power ministry official.

Both the countries are planning to bear the inter-connection costs in their respective territories, while India is also weighing options to provide soft loans to Bangladesh to set up its connecting grid.

The Washington-based multilateral donor agency – World Bank – has also shown interest to fund the connecting grid – the first ever between the two neighbours.

Power ministry officials said initially they are planning import the power from the Indian state of West Bengal.

Electricity inter-connection between the Indian state of Tripura and Bangladesh’s eastern region is also under consideration.

There is also a plan for investment from Bangladesh for installation of a 740-mw combined cycle gas-fired power plant in Agartala, the capital of Tripura, said the official.

A memorandum of understanding (MoU) between Bangladesh and India would be signed for bilateral cooperation in power sector during Prime Minister’s visit to New Delhi later this month.

Bangladesh requires additional electricity supplies as the country’s electricity generation is now hovering around 3,700 mw against the peak hour demand for over 5,500 mw.

The country’s electricity demand has been growing by 7.50 per cent annually since 1990.

Around 40 per cent of its population has access to electricity — one of the lowest in the world —, the power ministry statistics reveals.

As of June 2009, Bangladesh’s electricity consumer-base reached 11 million. The country has now 8,000 kilometers of electricity transmission lines, 256,000 kilometers of distribution lines.

Boosting electricity generation is a key priority of the Awami League government.

It has pledged to generate 5,000 mw of power by 2011, and 7,000 mw by 2013.

When we explore the fact of our infrustructure weekness ,we clearly find that electricity problem is the vital. So this is the first issue for Development.

Bangladesh plans to set up a fund that will invest as much as $10 billion in energy and power projects within the next decade to resolve an electricity shortage, a senior official said.

The 11-month-old government also is seeking to attract about $4 billion of investments in power plants and a liquefied- natural-gas import terminal, and will meet potential investors in London, New York and Singapore in December, said Tawfiq-e-Elahi Chowdhury, 64, energy adviser to Prime Minister Sheikh Hasina Wajed who also holds the post of energy minister.

“The potential demand for electricity is maybe twice as much as we are producing now,” Chowdhury said in an interview in Dhaka yesterday. “It’s not just trying to meet today’s gap; it’s trying to stay ahead of the curve, which is going to be very difficult.”

Hasina has vowed to resolve an electricity crisis that has plagued the south Asian nation with a history of military coups since independence from Pakistan in 1971, by engaging the private sector and helming the energy and power ministry. The government needs to address its “acute power shortages” to attract more investments from abroad, the Asian Development Bank said in its 2009 report on the country.

The government has faced a “twin problem” of a shortage in the supply of natural gas, its primary fuel for power, and generation capacity since it came to power in January, Chowdhury said. Former Prime Minister Khaleda Zia did “very little exploration” when she was in power from 1996 to 2001, he added.

The nation of 162 million people, whose economy is half the size of Singapore, aims to add another 5,000 megawatts of daily power generation capacity in the next five years, Chowdhury said.

Demand exceeds the current capacity by about 1,000 megawatts at the “peak hour,” excluding “a lot of areas” in Bangladesh which don’t have access to electricity, he said.

Attracting Investors

The economy grew 5.9 percent in the year to June, faster than any southeast Asian nation and almost on par with India’s 6 percent expansion. It will grow 5.2 percent in the year to June 2010, the ADB said.

The government plans to set up the energy and power fund in the middle of next year, Chowdhury said.

“I’m hoping that in five to 10 years it will be a $10 billion fund,” said Chowdhury, who obtained a Ph.D. in economics and population from Harvard University in 1983.

The fund will invest in the equity and debt of coal, oil and gas companies as well as power projects along with companies, he said. The government is still working on the structure of the fund, including how it will be securitized and whether it will be traded, he said.

It is seeking to attract non-resident Bangladeshis, who send about $7 billion of remittances each year, as well as banks and insurance firms to invest in the fund, Chowdhury said. The returns will be “competitive,” he said.

Energy Saving

The government wants to attract foreign companies and investors, through the planned meetings in December, to build 2,000 megawatt coal-fired power plants and smaller ones, he said.

The LNG import terminal it plans to build near Chittagong port, in southeastern Bangladesh, will cost about $1 billion, Chowdhury said. LNG is gas that is cooled to a liquid for transport by ship to markets not connected by pipelines. The fuel is received at import terminals and converted back to a gaseous form so it can be piped to users.

The government, which has started discussions to start a nuclear power plant, is also exploring prospects for renewable sources of power, including wind and solar energy as well as small hydroelectric projects, Chowdhury said.

It will distribute 15 million energy-saving bulbs to households for free in February, and another 16 million later, a move Chowdhury said would help free up about 300 megawatts to 400 megawatts of power capacity.

The nation introduced daylight saving in June, shifting the clock earlier by an hour, Chowdhury said in his office, where the air-conditioning was off and the windows opened.

Hasina’s political alliance was swept back to power in last December’s national elections that ended two years of military- backed emergency rule in the country. Hasina had been ousted in 2001.

Dr. Dipu Moni, MP, Foreign Minister of the People’s Republic of Bangladesh undertook an official visit to India from 7-10 September 2009. During the visit, she held bilateral talks with the External Affairs Minister of the Republic of India Shri S.M. Krishna on a range of issues pertaining to India-Bangladesh relations. Dr. Dipu Moni also called on the Prime Minister of India Dr. Manmohan Singh, Union Minister of Finance Shri Pranab Mukherjee and Union Minister for Water Resources and Parliamentary Affairs Shri Pawan Kumar Bansal. She was accompanied during the visit by her spouse Mr. Tawfique Nawaz, Foreign Secretary Ambassador Mijarul Quayes, Director General ( South Asia ) in the Ministry of Foreign Affairs Mr. Muhammad Imran and Private Secretary to the Foreign Minister, Mr. Jishnu Roy Choudhury.

The visit was marked by warmth and cordiality and a commitment to strengthen bilateral relations. Each side showed a keenness to respond positively to the concerns of the other.

During Dr. Dipu Moni’s call on the Prime Minister of India, the Prime Minister mentioned that India attached the highest priority to its relations with Bangladesh . He reiterated his invitation to H.E. Prime Minister Sheikh Hasina to visit India at an early date. He expressed his hope that her visit would write a new chapter in India-Bangladesh relations.

During the official talks, the two Ministers noted the multifaceted nature of relations between the two countries and the historical and traditional bonds of friendship. They also noted that recent elections have provided both countries with a historical opportunity to take India-Bangladesh relations to greater heights. It was in this spirit that both Ministers discussed the entire gamut of bilateral relations and agreed on the following:

- Both sides recognized the need to expedite negotiations with a view to finalize an agreement for sharing of the waters of Teesta river. Towards this end, they agreed to mandate their respective Foreign Offices to meet and discuss the technical and other parameters of this issue. They agreed to immediately commence Joint Hydrological Observations on the river. They also agreed to undertake bank protection works, dredging of Ichhamati river and minor irrigation/drinking water schemes on Feni river.

- The Bangladesh side thanked the Indian side for the hospitality and cooperation extended to the Bangladesh Parliamentary delegation during their visit to the proposed Tipaimukh Dam site. In this context, the Bangladesh side welcomed India ’s reassurance that it would not take steps that would adversely impact Bangladesh .

- Both sides recognized the importance of bilateral and regional connectivity. In this context, both sides discussed designating Ashuganj as a new port of call under Article-23 of the Inland Water Transit and Trade Agreement as well as the use of Chittagong port by India . Bangladesh side agreed to provide access to Ashuganj Port to facilitate the transportation of the Over Dimensional Consignments for the Palatana Power Project in Tripura.

- Indian side agreed to facilitate Nepal-Bangladesh and Bhutan-Bangladesh connectivity.

- Both sides agreed to enhance cooperation in the power sector. India agreed to provide at least 100 MW to Bangladesh on a priority basis. Ahead of this, it will also undertake a feasibility study on power grid inter-connectivity for transmission lines, etc. from India to Bangladesh .

- Both sides agreed on the re-opening Sabroom-Ramgarh trade point as well as opening a land route at Demagiri-Thegamukh on the Mizoram border for bilateral trade.

- India agreed in principle to provide a Line of Credit for railway projects and supply of locomotives, coaches and buses. India offered to take up construction of Akhaura-Agartala railway link under Indian assistance.

- India also agreed to assist Bangladesh in the dredging sector.

- Both sides agreed to start Border Haats at the Bangladesh-Meghalaya border for mutual benefit of the people in these areas.

- Both sides agreed to movement of containerised cargo by rail and water for bilateral trade.

- Both sides welcomed the holding of the Joint Working Group on Trade last month and discussed broad economic issues with a view to fully activate all institutional mechanisms to promote two-way trade, initiate long pending trade facilitation measures and facilitate movement of businessmen and professionals. Bangladesh specifically raised the issue of duty free access to Bangladeshi commodities, removal of Non Tariff and Para Tariff Barriers and improvement of infrastructures on the Indian side. Indian side expressed its readiness to assist Bangladesh in strengthening the Bangladesh Standards and Testing Institute. It also requested for removal of barriers to Indian investments and port restrictions for specific commodities.

- Both sides agreed to comprehensively address all outstanding land boundary issues. Both sides expressed their intent to resolve outstanding issues relating to Dahagram and Angarpota enclaves and the Tin Bigha Corridor. Both sides also recognized the need for electrification of Dahagram and Angarpota enclaves as a humanitarian gesture.

- The two Ministers reiterated their resolve to strengthen bilateral co-operation to deter the recurrence of terrorist incidents. Both sides also reiterated their resolve not to allow the use of their territories for activities inimical to each other’s security interests.

- Both sides agreed to conclude the following three agreements:

a. Agreement for mutual legal assistance on criminal matters,

b. Agreement of transfer of sentenced persons,

c. Agreement on combating international terrorism, organized crime and illegal drug trafficking.

The two Ministers reiterated their conviction that opportunities for fruitful collaboration between the two countries in furthering mutual interests were enormous and resolved to remain engaged to expeditiously address all bilateral issues.

source : www.energybangla.com