BANGLADESH OIL, GAS AND MINERAL CORPORATION (PETROBANGLA)

PRESENTATION FOR EMRD

INCREASED GAS PRODUCTION & EVACUATION PLAN

2010-2015
25th JULY 2010

Contents___________________

Foreword

Simulation Results

Summary Transmission System Demand Supply Scenario Gas Production Drilling Program Evacuation Needs

Evacuation Options Evaluation of Options Sector Capabilities Major Challenges Conclusions

Foreword________________
PB and its companies are implementing a number of projects to improve current gas supply situation at the earliest. Among IOCs, Chevron plans to increase BY, JB & MB field productions over the next 3 years. Chevrons plan was reviewed by EMRD on 23 June 2010. Findings of a simulation exercise done by PB were also placed in the review meeting. A comprehensive gas evacuation plan has now been drawn as directed. Results of the analysis with particular focus on evacuation of Chevrons additional gas are now presented for review and decision by EMRD.

Summary___________________
A network simulation exercise was done under the supervision of PB using GTCLs Pipeline Studio Software. Planned gas production from various fields and demand projection (mmscfd) up to Y 2015 were used as inputs in the exercise: 2011 Production Demand 2487 2520 2012 2822 3043 2013 3402 3341 2014 3412 3591 2015 3782 3746

New Pipelines required for full evacuation of additional gas were identified through careful examination/evaluation of options.
Pipelines include long distance new trunk lines and also loop-lines required for de-bottlenecking of existing system, targeted for completion within next 2-4 years.

Gas Transmission System____

KTL

JFA
24 14 24 20

JB

BB

BY
20

30

12

FNG

RSD

Muchai VS
30 24

14

MB

JFA
24

TFA/ JFCL
12

TFA/ RPCL
30 12

HBJ Hub
24

HBJ

APS/AFC
24

West Zone

30

30

Elenga MS
12

24 30

Dhanua MS

Monohordi

24

MS
30 TFA/ GPS/ UFFL/ PUFF 30

Ashuganj MS

24

TGF

TFA

TFA

30

30

Salda

Bangura GF

Meghna

TFA

CGS Demra

20

BKB Hub

BKB

BFA TFA Siddhirganj

30 24

Feni GF

LEGEND
Firm lines: Existing Dotted lines: Under Implementation/Proposed

BFA BFA

DemandSupply Scenario____
Present demand-supply scenario is imbalanced by nearly a 20% gap based on day total demand. At peak hourly demand rates, gas off-take exceeds throughput by a higher margin to the tune of 30%. Gas demand projection (mmscfd) of six PB marketing companies upto Y 2015 is as follows:
Company Present Demand 1689 72 380 131 91 7 2363 Present Availability 1470 54 250 131 76 7 1981 Future Demand 2011 1936 90 485 181 102 7 2801 2520 2012 2268 100 502 308 136 68 3382 3043 2013 2493 105 512 301 197 104 3712 3341 2014 2694 110 523 303 199 160 3989 3591 2015 2838 120 530 305 202 167 4162 3746

TGTDCL BGSL KGDCL JGTDCL PGCL BAPEX/SGCL Gross Demand Demand at 90% LF

The production augmentation plan of Petrobangla including that of IOCs, Chevron in particular, is aimed at minimizing the demand-supply imbalance at the fastest possible time

Gas Production _____________

Total gas production in the country is around 2000 mmscfd. PB companies produce 947 mmscfd (47% of total). 393 mmscfd will b added by Y 2012 and 180 mmscfd by Y 2015. Chevron fields produce 900 mmscfd (45% of total). 180 mmscfd will be added by Y 2011, 380 mmscfd by Y 2012 and 380 mmscfd by Y 2013. Remaining 160 mmscfd (8% of total) is produced by two other IOCs: Tullow (120 mmscfd) and Cairn (40 mmscfd). Cairn will add 30 mmscfd from Sangu (south) by Dec 2010. Total additional PB + Chevron + Cairn production will be: 210 mmscfd + 773 mmscfd + 380 mmscfd + 180 mmscfd by by by by Y 2011 Y 2012 Y 2013 Y 2015.

1543 mmscfd

PRODUCTION AUGMENTATION PLAN (mmscfd) - Petrobangla Fields

Existing Capacity Titas Habiganj Rashidpur Fenchuganj Kailashtila Beanibazar Sylhet Narsingdi Salda Bakhrabad Shahbazpur Meghna Semutang Sundalpur/ Srikail/ Kapasia/ Mubarakpur Sub-total : 420 260 53 32 97 18 2 35 11 34 15 0 0

Existing Production 408 260 49 25 97 16 7 33 8 36 8 0 0

Dec-10 428 260 49 45 97 16 15 33 23 36 8 15 15

Dec-11 478 260 49 65 97 16 15 33 38 36 8 15 15

Dec-12 578 260 84 65 97 16 15 33 38 56 8 15 15

Dec-13 578 260 84 65 97 16 15 33 38 56 8 15 15

Dec-14 578 260 84 65 97 16 25 33 38 56 8 15 15

Dec-15 678 260 124 65 127 16 25 33 38 56 8 15 15

15

60

60

60

60

60

977

947

1055

1185

1340

1340

1350

1520

PRODUCTION AUGMENTATION PLAN (mmscfd) - IOC FIELDS

Existing Capacity
Jalalabad Moulvibazar Bibiyana Bangura Feni Sangu Sangu (South) Offshore bidding 2008 Block-7 Sub-total:

Existing Production 150 60 720 120 2 40 0 0 0 1092

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

230 75 600 100 3 35 0 0 0 1043

150 60 720 120 2 40 30 0 0 1122

230 160 720 120 2 40 30 0 0 1302

230 160 900 120 2 40 30 0 0 1482

430 360 1080 120 2 40 30 0 0 2062

430 360 1080 120 2 40 30 0 0 2062

430 360 1080 120 2 40 30 200 0 2262

LNG IMPORT (Equivalent mmscfd)

0 Total : 2020

0 2039

0 2177

0 2487

500 3322

500 3902

500 3912

500 4282

PROJECTED GRID INTAKE VOLUMES AGAINST AUGMENTED PRODUCTION (mmscfd) - By Petrobangla Fields

Existing Capacity

Existing Production Dec-10 Dec-11 478 220 49 65 74 33 38 36 15 15 15 15 15 1068

Grid Intake Volumes Dec-12 578 220 84 65 74 33 38 56 15 15 15 15 15 1223 Dec-13 578 220 84 65 74 33 38 56 15 15 15 15 15 1223 Dec-14 578 220 84 65 74 33 38 56 15 15 15 15 15 1223 Dec-15 678 220 124 65 104 33 38 56 15 15 15 15 15 1393

Titas Habiganj Rashidpur Fenchuganj Kailashtila Narsingdi Salda Bakhrabad Meghna Sundalpur Srikail Kapasia Mubarakpur Sub-total :

420 260 53 32 74 35 11 34 0 0 0 0 0 919

408 260 49 25 74 33 8 36 0 0 0 0 0 893

428 220 49 45 74 33 23 36 15 15 0 0 0 938

PROJECTED GRID INTAKE VOLUMES AGAINST AUGMENTED PRODUCTION (mmscfd) - By IOC Fields Grid Intake Volumes Dec-10 Jalalabad Moulvibazar Bibiyana Bangura Feni Sangu (South) Offshore bidding 2008 Block-7 230 75 600 100 3 0 0 0 150 60 720 120 2 0 0 0 150 60 720 120 2 30 0 0 Dec-11 230 160 720 120 2 30 0 0 Dec-12 230 360 750 120 2 30 0 0 Dec-13 430 360 930 120 2 30 0 0 Dec-14 430 360 930 120 2 30 0 0 Dec-15 430 360 930 120 2 30 200 0

Existing Capacity

Existing Production

Sub-total:

1008

1052

1082

1262

1492

1872

1872

2072

LNG Import (Equivalent to mmscfd) 0 Total : 1927 0 1945 0 2020 0 2330 500 3215 500 3595 500 3595 500 3965

Drilling Program ___________

PB
Short Term (Up to Dec. 2010) - Work over - Appraisal - Exploration : 6 wells : : 1 well

Chevron
Short Term (Up to Dec. 2010) - Work over - Appraisal - Exploration : : : 1 well

Mid Term ( Up to Dec. 2013) - Work over - Appraisal - Exploration : 1 well : 10 wells : 3 wells

Mid Term ( Up to Dec. 2013) - Work over - Appraisal - Development : : :19 wells

Long Term ( Up to Dec. 2015) - Appraisal - Development - Exploration : 9 wells : : -

Long Term ( Up to Dec. 2015) - Appraisal - Development - Exploration : : 3 wells : -

Evacuation Needs ________

For increased Production - PB
Among PB fields, the entire increased production of TGF (270 mmscfd) can/would be evacuated without flowing through Compressor Stations. To this end 30 inch dia. 61 km loop line project has been taken up for completion by Y 2013. Increased production of other three PB fields KGF, FGF & RGF (145 mmscfd) over the existing production of 150 mmscfd (total 295 mmscfd) will be needed to be evacuated through Muchai & Ashuganj Compressor Stations by Y 2012.

For increased Production Chevron

JBF :
Present production of 150 mmscfd is being evacuated by existing pipelines leaving behind a stranded production of 80 mmscfd. Total 230 mmscfd existing production capacity can/would be evacuated once Muchai Compressor Station is commissioned by Y 2011 followed by Ashuganj Compressor Station to be commissioned by Y 2012. Additional 200 mmscfd in Y 2013 would require a new evacuation route because this volume can not be passed through existing pipelines and Compressor Stations to be installed.

Evacuation Needs (contd.) ____

MBF:
Present production of 60 mmscfd is being evacuated by existing pipelines. Total additional production of 300 mmscfd by Y 2012 together with existing 60 mmscfd (total 360 mmscfd) can/would be evacuated once Muchai Compressor Station is commissioned by Y 2011 followed by Ashuganj Compressor Station to be commissioned by Y 2012.

BYF
Present production of 720 mmscfd is being evacuated by existing pipelines. 150 mmscfd out of total additional production of 360 mmscfd by Y 2013 would be required by and supplied to the two Bibiyana IPPs targeted for completion by Y 2013 leaving 210 mmscfd for evacuation to the national gas grid Total additional production of 210 mmscfd by Y 2013 available for national gas grid together with existing 720 mmscfd (total 930 mmscfd) can not all be evacuated by the existing pipelines and Compressor Stations. Taking into account 1160 mmscfd (max) capacity of Muchai Compressor Station and considering the production of above mentioned PB & Chevron fields which must be routed through the Muchai Compressor station, the calculated volume of BYF that can be

passed through this compressor station is only 275 mmscfd.

Therefore, the remainder 930-275 = 655 mmscfd of BYF production must have a altogether new evacuation route to be established at the soonest.

Simulation Results__________
Pipelines required to evacuate additional production from upstream of Muchai Compressor Station

Sl. No 1.

Description of Pipeline

Evacuation of Chevrons planned additional 560 mmscfd from Jalalabad GF and Bibiyana GF : Option-A : JBF-BYF-Muchai-Ashuganj-Monohordi through Compressor Stations at Muchai & Ashuganj(210 km) Option-B : JBF-BYF-Dhanua bypassing Compressor Stations (190 km) Option-C : JBF-BYF-Muchai-Ashuganj-Monohordi Dhanua- Elenga Bypassing Compressor Stations at Muchai & Ashuganj (300 km)

2.

Evacuation of Chevrons planned additional 300 mmscfd from Moulvibazar GF : Construction of 22 km parallel pipeline from Moulvibazar GF to Muchai Manifold Station.

Simulation Results (Contd.)_______

Pipelines required for de-bottlenecking of existing transmission system.
Sl. No 1.

Description of Pipeline Khatihata to Bhadugar B.Baria (TGF L-A): Construction 24 inch dia. 12 km high pressure (1135 psig) pipeline to evacuate 200 mmscfd additional gas production from Titas Gas Fields. Dhanua to Elenga : This section of pipeline (30 inch dia. 52 km) is part of approved project namely Monohordi-Dhanua-Elenga-East bank of Jamuna Bridge project. Construction of Monohordi-Dhanua and Elenga-East Bank section is ongoing under ADB finance. Financing for Dhanua-Elenga section need to be arranged. Bangabandhu Bridge West End to Nalka: This section of pipeline (30 inch dia. 15 km) is part of approved project namely East Bank of Jamuna Bridge to Nalka, Hatikamrul to Ishwardi to Bheramara project. Construction of Hatikamrul to Ishwardi to Bheramara section is ongoing under ADB finance. Financing for Bangabandhu Bridge West End to Nalka section need to be arranged.

2.

3.

Simulation Results (Contd.)_______

Pipelines required for hook up of new gas fields.
Sl. No
1.

Description of Pipeline
Kapasia GF to Amraid: Construction of 12 inch ND X 4 km pipeline from Kapasia gas field to MonohordiDhahua pipeline intake point at Amraid is needed for evacuation of gas from Kapasia gas field. Sundalpur GF to Feni : Construction of 12 inch ND X 30 km pipeline from Sundalpur gas field to BakhrabadChittagong pipeline intake point at Feni is needed for evacuation of gas from Sundalpur gas field.

2.

3.

Srikail GF to AB Pipeline: Construction of 8 inch ND X 3 km pipeline from Srikail gas field to AB pipeline MLV2 (Karoibari) intake point is needed for evacuation of gas from Srikail gas field. Mubarakpur GF to Baghabari: Construction of 12 inch ND X 30 km pipeline from Mubarakpur gas field to Baghabari CGS is needed for evacuation of gas from Mubarakpur gas field.

4.

Pipeline required for evacuation of LNG.

Sl. No 1.

Description of Pipeline
Maheshkhali to Rangadia: Construction of 30 inch Dia X 90 km pipeline from Maheshkhali LNG receiving station to Rangadia hook-up point of Chittagong Ring Main for evacuation of LNG.

Evacuation Options

_____________

Simulation exercise was carried out for evacuation of 790 mmscfd out of a total 940 mmscfd additional gas production by Chevron from its three fields by Y 2013 considering the balance 150 mmscfd to remain dedicated for the two Bibiyana IPPs. Taking into account Muchai Compressor Station designed capacity of 1160 mmscfd and that of Ashuganj Compressor Station 1500 mmscfd, a quantity of 850 mmscfd gas will be needed to be evacuated bypassing the Muchai & Ashuganj Compressor Stations. To address the above evacuation need the simulation exercise presents three different options complying with steady state convergence which are as follows and pictorially depicted in the next three linked slides:

Evacuation Route : Option-A : JB-BY-Muchai-Ashuganj-Monohordi (210 km)

Flow through Compressor Stations, required Comp cap (Muchai 2010, Ashuganj-2350 mmscfd)

Evacuation Route : Option-B : JB-BY-Dhanua (190 km)

Flow through Compressor Stations, required Comp cap (Muchai 1160, Ashuganj-1500 mmscfd)

Evacuation Route: Option-C : JB-BY-Muchai-Ashuganj-Elenga (300 km)

Flow not through Compressor Stations, required Comp cap (Muchai 1160, Ashuganj-1500 mmscfd)

Evaluation of Options ________

Criteria
Route

Option-A
JBF-BYF-Muchai-Ashuganj-Monohordi through compressors 210 km Converges with a 34 inch dia pipeline

Option-B
JBF-BYF-Dhanua

Option-C
JBF-BYF-Muchai-Ashuganj-Elenga bypassing compressors 300 km Does not converge due to pressure mismatch BDT 3500-4000 Crores

Length Simulation convergence Estimated Cost

190 km Converges with a 34 inch dia pipeline

BDT 3200-3500 Crores

BDT 2300-2500 Crores

Terrain Condition

Developed terrain, Hilly area 2 km, Tea & Rubber Garden 10 km. Remaining 198 km is normal cross-country land. Involves major river crossings (Meghna & 6 others)

30 km out 190 km is Haor area, remaining 160 km is normal cross-country land. About 40 km falls under forest area. Haor area remains dry for nearly 5 months with paddy cultivation. Water table is learnt to remain 20 feet below land surface and cultivation requires irrigations Route is different from Muchai & Ashuganj Compressor Loop enhance no additional compression capacity needed. Alternative evacuation corridor will be developed under this option offering increased operational flexibility & overall system reliability Proximity to future gas source locations in Sunamganj & Netrakona Districts.

Developed terrain, Hilly area 2 km, Tea & Rubber Garden 10 km. Remaining 288 km is normal crosscountry land. Involves major river crossings (Meghna & 9 others)

Compression

Passes through Muchai & Ashuganj Compressor Loop and Muchai & Ashuganj Compressor capacities need to be almost doubled. Same evacuation corridor as the existing one requiring additional land acquisition which presents difficulties at many locations due to infrastructure development Will be limited to existing gas fields only

Bypasses Muchai & Ashuganj Compressor Loop, but this option does not converge in the simulation Same evacuation corridor as the existing one requiring additional land acquisition Will be limited to existing gas fields only

Corridor

Connectivity

Sector Capabilities______________
GTCL operates 9 major high-pressure transmission pipeline systems (20-30 inches Dia). Out of these pipelines initial 5 were built by expatriate EPC contractors. Subsequent 4 pipelines were designed & materials procured by GTCLs personnel and construction done by local contractors under GTCL supervision. Currently 7 pipeline (12-30 inches Dia) projects under implementation out of which 3 are near completion.

Sector Capabilities (Contd.)__________

GTCL now has proven capabilities for Front End Engineering Design and Detailed Engineering Design for high pressure transmission pipelines Presently 14 nos. of local contractors of Category-1.4 have the proven capabilities for constructing high pressure transmission pipelines pipelines upto 30 inches Dia Regulating & Metering Station FEED is done by GTCL but constructed by expatriate EPC contractors. Recently the EPCs use local contractors for insitu fabrication, erection & installation of the stations HDD River Crossing work are needed to be done by expatriate EPCs.

Major Challenges_____________
Land Acquisition/Requisition for Right of Way (ROW) involves huge complication and unexpected delays. Long Lead Times are needed for Material Procurement typically divided in 7-10 bid packages often requiring re-biddings. Pipeline Construction activity is season-bound. Window of opportunity typically lasts for maximum six months of the year. Financing and project approval is a very protracted process causing delay in project implementation. Environmental study and clearance is also a circuitous and long drawn process. Due to a number of large size transmission pipeline projects being implemented, GTCL has human resource limitations as well.

Conclusions_______________
Petrobangla observes Option-B (JB-BY-Dhanua) pipeline as the preferred solution from operational point of view. Considered from route/terrain characteristics point of view, about 30 km length (15% of total) presents some challenge which may be overcome by technological alternatives for construction to be decided in due course. For expeditious implementation the pipeline is recommended for construction under a turn-key contract for which necessary draft bid documents are available in GTCL.

Land acquisition for the ROW need to be started from next dry season (beginning Nov 2010). The construction of the pipeline can commence from Nov 2011 provided the land acquisition is completed by that time. The financing of the project to be decided by the GoB expeditiously.