Page 5 - AsianOil Week 05

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Gazprom eyes increased role in Bangladesh
PROJECTS & COMPANIES
RUSSIA’S Gazprom signed memoranda of understandings (MoUs) on January 28 with Bangladesh’s state oil company Petrobangla and its subsidiary Bapex on joint upstream activities.
e deal with Petrobangla covers strategic co-operation in the exploration, production and transportation of hydrocarbons, the Bangladeshi company said in a statement. Meanwhile, the document with Bapex, Petrobangla’s upstream arm, provides for joint seismic studies and other activity at two gas elds on Bangladesh’s Bhola Island.
Bangladesh is a major gas producer in its own right, extracting 27.5bn cubic metres in 2018, according to BP statistics. But the country began struggling with shortages several years ago as a result of soaring demand for gas among house- holds and in the power generation sector.
ese shortages have led to rolling blackouts – a key drag on economic growth.
Bangladesh’s solution has been to invest more in domestic gas production on the one hand, and expand imports of LNG on the other. It commis- sioned its rst LNG terminal o Maheshkhali Island in late 2018, and began receiving 2.5mn tonnes per year of supplies under a deal with Qatar. Its LNG intake is slated to reach 10-15mn tpy within ve years, assuming new regasi ca- tion capacity is built.
Gazprom has been working in Bangla- desh since 2012, under drilling contracts with
Petrobangla, Bapex and other state entities. rough the latest deals, the Russian company hopes to expand its footprint in a fast-growing market. It may also be hoping to develop gas that can be sold to consumers in neighbouring India. In addition, strengthening ties with Bangladeshi partners will also help Gazprom bid for new LNG supply contracts in the country.
Yamal LNG, an LNG terminal operated by Gazprom’s domestic rival Novatek, shipped its rst LNG cargo to Bangladesh in December. e cargo was supplied under the project’s long-term o ake agreement with France’s Total.™
Indian gas pricing reform to spur upstream investment
POLICY
INDIA’S drive to increase domestic consump- tion of natural gas has seen the government pledge to reform pricing as well as expand the country’s pipeline network.
In unveiling the government’s nancial year 2020-2021 budget on February 1, Indian Finance Minister Nirmala Sithraman said: “To deepen the gas market in India further reforms will be undertaken to facilitate transparent price discov- eryandeaseoftransactions.”
Domestic gas developers, in both the state and private sector, have long complained that India’s current pricing system does not re ect market realities.
New Delhi sets domestic gas prices every six months using the weighted average price of gas in hubs in the US, Canada, the UK and Russia. Prices are also set at a three-month lag to prevail- ing market rates in those four hubs.
Indian producers, however, argue that local prices should be higher than that found on inter- national hubs, which enjoy a surplus of gas that India does not.
While India introduced in February 2019 pricing and marketing freedom for all new gas discoveries whose eld development plans (FDP) were still to be approved, developers want already producing fields to enjoy the samefreedoms.
State-run Oil and Natural Gas Corp.’s (ONGC) chairman and managing director, Shashi Shanker, told local media recently that the company had lost INR51bn ($713mn) between 2017-2018 and 2018-2019 owing to low gas prices.
India wants to drive up gas’ share of the pri- mary energy mix to tackle chronic levels of urban air pollution and intends for the cleaner-burning
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