Govt plans to product gas from Semutang gas field without consultation of CHT institutions

Govt plans to product gas from Semutang gas field without consultation
of CHT institutions

Kapaeeng News Release, 31 March 2009

Very recently, Government of Bangladesh (GoB) undertakes plan to begin
production of gas from Semutang gas field in Manikchari upazila under
Khagrachari district in Chittagong Hill Tracts (CHT) without having
consultation with CHT Regional Council (CHTRC) and Khagrachari Hill
District Council (HDC).

It is mentionable that the CHT Peace Accord of 1997 introduces CHTRC
as an apex body of CHT administration. According to the CHTRC Act of
1998, it was bestowed with the power of supervision and coordination
of the general administration, law and order and developments of the
three hill districts and issuing licenses for setting up heavy
industries in this region.

On the other, there is provision in the CHT Peace Accord (Section 19
of Part B) that all development programs at national level shall be
implemented through the HDC by the concerned Ministry/ Department/
Institution. According to the HDC Act of 1998, it was also bestowed
with the authority of issuing license for local industries and
business and receiving part of royalties from license or lease given
by the government for exploration and extraction of mineral resources.
However, violating these provisions, GoB decides to start production
of gas from Semutang gas field in Khagrachari district. Kapaeeng
Foundation contacted to the office bearer of CHTRC, he, requesting not
to mention his name, said that CHTRC was not consulted on this matter.
When in February, Industry Minister Mr. Dilip Barua visited the
Semutang gas field area, he even did not inform the issue to the
CHTRC.

Kapaeeng Foundation tried to contact to the authority of Khagrachari
HDC over telephone. But no body was found to receive the call.
However, reliable sources confirmed that government or authority of
Bapex did not consult with the Khagrachari HDC on this matter.
For information, please find the news published in The Daily Star below.

==================
The Daily Star, Sunday, 29 March 2009
Semutang gas to ease Ctg crisis
Bapex to start production in 2 years
Jasim Majumder, Khagrachhari

Bangladesh Petroleum Exploration Company (Bapex) expects to begin
production of gas from Semutang gas field in Khagrachhari to help ease
the deficit of gas supply in Chittagong city.

Preparations for production from the gas field have already begun,
more than 40 years after the field was discovered.

High officials of the company said production of 15 million cubic feet
of gas per day from the field is expected to begin by June 2011.
The Executive Committee of National Economic Council (Ecnec) has
already approved a Tk 340 crore project titled “Exploration and
Production Capacity Building of Bapex" in this regard.

Under this project, Bapex is to get Tk 200 crore while Bakhrabad Gas
System Ltd will get Tk 140 crore. Bakhrabad Gas System Ltd is to set
up a 70 km high-pressure gas pipeline using 10-inch radius pipes this
year from the field to Chittagong for smooth transfer of gas.

Md Mohsin, secretary of the energy ministry and Jalal Ahmed, chairman
of Petrobangla, jointly visited the Semutang gas field area earlier
this month and announced the production plan from well no 5 of the
field.

They said that the additional gas produced at this field would help
towards beating the severe energy crisis in the country.

The government plans to supply 10 million cubic feet of gas per day to
the business capital of Chittagong and the remaining 5 million cubic
feet will be added to the national pipeline, sources said.

Officials said they expect to raise the production to 20 million cubic
feet of gas per day soon afterwards.
The government is also thinking of setting up some production units
and mills in the area to ease unemployment in Khagrachhari,
Petrobangla chairman Jalal Ahmed said.

Energy Secretary Md Mohsin also said work on gas pipeline will begin
once all official and legal processes have been completed.
Managing Director of Bapex Amad Uddin said the company is continuing
work and research to ensure the smooth flow of gas to Chittagong city,
which lies some 70 kilometres away.

At present, Chittagong city has a demand of 350-360 million cubic feet
of gas per day. Of this, Bakhrabad Gas authority supplies 210 to 220
million cubic feet while 50 million cubic feet comes from Sanghu Gas
field, while the national pipeline supplies some more.

Earlier, in February, Industry Minister Dilip Barua visited the gas
field area. At the time he had noted that the work at industries in
Chittagong was being hampered due to the gas crisis, and promised that
the government has taken an initiatives to extract gas from Simutang
gas field.

SEMUTANG GAS FIELD
The British company Shell and Pakistan Petroleum Ltd jointly carried
out the exploration of gas in 22 acres of the area in 1963,
discovering the field at Juggachhola Semutang area under Manikchhari
upazila in Khagrachhari. Five wells were dug here at the time.

Both teams experimentally extracted gas and oil from the field in
1969. But the collapse of a well put a stop to work here at the time.
The then Pakistan government resumed work in 1970 but that was also
stopped.

In 1983, the government took initiatives to go into production but
work was stopped again when the Shantibahini abducted two British
engineers working here.

Exploration was resumed by Shell in 1994 under a production sharing
contract but that was again dropped since they thought that production
from the field would not be profitable.