38164-013: Natural Gas Access Improvement Project (formerly Clean Fuel Development Project) | Asian Development Bank

Bangladesh: Natural Gas Access Improvement Project (formerly Clean Fuel Development Project)

Sovereign (Public) Project | 38164-013 Status: Active

The objective of the Project is to increase access to, and reliability of, natural gas supply in Bangladesh through capacity expansion and efficiency improvements in natural gas production, transmission and distribution systems.

The Project comprises four components.

PART A: TRANSMISSION CAPACITY EXPANSION

Part A-1: construction of a 30-inch, approximately 61 kilometer gas transmission pipeline from Ashuganj to Bakhrabad, and the installation of interface metering and regulating stations at selected locations (Monohordi, Dewanbag, Kutumbupur, Febi and Barabkundu); and

Part A-2: installation of one compressor with throughput of approximately 1,500 MMCFD in Ashuganj and one compressor with throughput of approximately 500 MMCFD in Elenga.

PART B: SAFETY AND SUPPLY EFFICIENCY IMPROVEMENT OF TITAS GAS FIELD

Part B-1: detailed investigation, design and implementation of safety measures to control gas seepage at problematic wells

Project Details

Project Officer
Nahar, Nazmun South Asia Department Request for information
Country
  • Bangladesh
Sector
  • Energy
 
Project Name Natural Gas Access Improvement Project (formerly Clean Fuel Development Project)
Project Number 38164-013
Country Bangladesh
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2622-BAN: Natural Gas Access Improvement Project (formerly Clean Fuel Development Project)
Ordinary capital resources US$ 261.00 million
Loan 2623-BAN: Natural Gas Access Improvement Project (formerly Clean Fuel Development Project)
concessional ordinary capital resources lending / Asian Development Fund US$ 5.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Sector / Subsector

Energy / Conventional energy generation - Energy efficiency and conservation - Energy sector development and institutional reform - Oil and gas transmission and distribution

Gender Equity and Mainstreaming Some gender elements
Description

The objective of the Project is to increase access to, and reliability of, natural gas supply in Bangladesh through capacity expansion and efficiency improvements in natural gas production, transmission and distribution systems.

The Project comprises four components.

PART A: TRANSMISSION CAPACITY EXPANSION

Part A-1: construction of a 30-inch, approximately 61 kilometer gas transmission pipeline from Ashuganj to Bakhrabad, and the installation of interface metering and regulating stations at selected locations (Monohordi, Dewanbag, Kutumbupur, Febi and Barabkundu); and

Part A-2: installation of one compressor with throughput of approximately 1,500 MMCFD in Ashuganj and one compressor with throughput of approximately 500 MMCFD in Elenga.

PART B: SAFETY AND SUPPLY EFFICIENCY IMPROVEMENT OF TITAS GAS FIELD

Part B-1: detailed investigation, design and implementation of safety measures to control gas seepage at problematic wells

Part B-2: drill four appraisal cum development wells, and design and construction of related processing plants

PART C: ACCESS IMPROVEMENT IN SOUTH WESTERN REGION

Construction of approximately 845 kilometer 2 inch to 20 inch distribution pipelines in the Borrower's south western region, comprising the districts of Kushtia, Jhenidah, Jessore, Khulna and Bagerhat (including Mongla).

PART D: SUPPLY AND DEMAND MANAGEMENT

Pilot a remote sensing metering system for industrial consumers and a prepaid metering system for domestic consumers within TGTDCL's gas distribution franchise area. TGTDCL will develop a list of project proposals to stimulate investments in gas use efficiency among its consumers, particularly industrial consumers.

Project Rationale and Linkage to Country/Regional Strategy

Natural gas contributes 70% of primary energy supply in Bangladesh. It has dominated the power sector, fueling 85% of power generation. As the country is highly dependent on natural gas for its economic development, the sustainability of gas supplies is critical. Government policy in the gas sector since 1993 has been to attract private investments to upstream gas field development while improving the network coverage and operational efficiency of companies that produce and distribute natural gas. Bangladesh managed to attract significant investments from the private sector for gas exploration and increased gas production by over 100% since 1998. The share of gas production by international oil companies (IOCs) grew to almost 50% of the total supply in 2008.

Exponentially increasing demand for gas has introduced a supply deficit. To address the demand supply gap, national oil companies and IOCs have been investing in existing fields and new discoveries to increase production. By 2017, these interventions and the recently concluded 3rd round of bidding will increase the gas supply by 74% compared to supply in 2008. The government is currently examining several options to further improve supply: (i) additional investment in existing fields, (ii) initiating another round of bidding for exploration; and (iii) importing liquefied natural gas as a medium- to long-term measure. The transmission and distribution network is inadequate to meet the needs of industry, commerce, and households. The capacity of the state gas companies is insufficiently developed to access international financing. Therefore gas transmission and distribution continue to need public financing.

Operational performance in the gas sector has been affected by inadequate investment in all subsectors, compounded by uneconomic tariffs, inadequate investment resources, inefficient use of gas, and inadequate capacity in the state-owned gas companies and the government. The government's gas sector reform road map (GSRR) is designed to address many of these issues. The GSRR and Asian Development Bank (ADB) policy dialogue with the government includes time-bound actions to improve the policy and regulatory environment, sector planning, and corporate governance, as well as to implement structural and pricing reforms. Some of the key actions, such as approving the GSRR, operationalizing the Bangladesh Energy Regulatory Commission (BERC), licensing gas companies, and cabinet approval for the proposed gas act, are already accomplished. The government is committed to continuing the implementation of other measures identified in the GSRR.

The proposed physical investments are the most urgent components of the gas sector's priority investment program. The gas sector master plan provides the basis for investment planning by the Bangladesh Oil, Gas, and Mineral Corporation (Petrobangla) and its affiliates. The need to provide gas to Chittagong from fields in the northeast and the constraints on the national supply of gas have focused investment priorities on these areas. Removing bottlenecks in the transmission system has become critical to ensuring the efficient delivery of higher gas volumes. Safety and supply efficiency improvement at the Titas gas field is necessary to avoid a major accident and sustain the current level of production from the field in the long term. With the extension of the natural gas transmission pipeline to the Khulna Division under the Gas Transmission and Development Project (GTDP), improving the distribution network in the southwest is essential to making gas available to consumers in that region.

Impact Increased and more reliable access to natural gas for sustained economic growth
Project Outcome
Description of Outcome Expanded capacity and improved efficiency in natural gas production, transmission, and distribution systems
Progress Toward Outcome

Gas sector losses has been reduced to less than 2% in the year 2017.

63MMCFD new capacity has been added to national gas grid under this component. Transmission capacity has been enhanced by installation of 2000MMCFD gas compressor stations at Ashugonj and Elenga. 61 KM new pipeline is constructed. One new power plant (Bheramara 360 MWp) has been connected.

Implementation Progress
Description of Project Outputs

Ashuganj-Bakhrabad gas transmission loopline of about 61 km

Gas compressors at Ashuganj and Elenga

Controlled gas seepage in the Titas gas field and four wells developed

845 km of pipelines in the southwestern gas distribution network

Introduction of prepaid meters for domestic consumers and remote meters for industrial consumers

Feasibility studies for energy efficiency improvements

Capacity building in BGFCL, GTCL, SGCL, and TGTDCL

Status of Implementation Progress (Outputs, Activities, and Issues)

Part A1:Asugonj-Bakhrabad loopline construction is complete.

Part A2: Installation of compressor stations in Ashugonj and Elenga are complete. Loan period is extended up to December 2018 to carry out the remaining civil works of the project coimponent A1.

Part B: Construction of 4 new gas wells and 2 processing plants have been completed in June 2017.

Part C: Procurement of the pipeline is done. Rupsha river crossing sub-component is complete and gas is available in Khulna city gate station. One power plant (Bheramara 360MW CCPP) is getting gas from this sub-component. However, due to declining domestic gas reserve, household gas connection sub-component under this project scope will be revised as per Government's request.

Part D: 8600 Prepaid meters are installed. Installation of 600 Remote Meters (Package 2) was cancelled formally.

Capacity Building: Complete

Geographical Location Ashuganj, Bagerhat District, Bakhrabad, Barabkunda, Brahmanbaria, Brahmanbaria District, Comilla District, Dewanbari, Elenga, Feni, Jessore District, Jhenaidah District, Khulna District, Kushtia District, Kutumbapur, Mongla, Mongla, Mongla, Monohordi
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The government, through the executing agencies, will ensure that the design, construction and operation of all project facilities comply with the environmental laws and regulations of Bangladesh and ADB's environmental policies and regulations, specifically ADB's Environment Policy (2002) and environmental mitigating measures and the environmental management plans described in the IEEs and in the summary IEE conducted for the project.

The EAs have prepared initial environmental examination (IEEs) for all components of the Project. The IEEs will be updated and approved to be in line with the summary IEE (SIEE) that was initially prepared for the Project. The Project does not require a full environmental impact assessment (EIA); however before the commencement of construction, the IEEs with the environmental management plans (EMPs) for each component will be detailed in the project-specific context and included in construction contracts. GTCL submitted an IEE for its component (Part A2) in 2011, which needs to be updated. BGFCL has recently drafted an IEE including the EMPs for its component (Part B). It is recommended that SGCL and GTCL will prepare/update the IEEs with EMPs for their components (Part A and C) before the commencement of civil works and associated activities.

For Part B, BGFCL has submitted an IEE report to ADB. BGFCL has planned to carry out drilling of 4 wells in Titas gas field and installation of two gas process plants. The major anticipated environmental impacts of the works includes emission of greenhouse gases from combustion of fossil fuel, contamination of surface water, erosion and sedimentation during trenching, noise pollution during construction and drilling of gas wells, impacts on local biodiversity and wildlife due to noise and vibration, damages of crops due to drilling and earthwork, etc. There are also possibilities of health hazards during handling of equipment and fuel. As a part of IEE, EMP is also proposed and adequate mitigation measures will be in place to address the major environmental impacts of the project components. For safety of the workers and community, adequate occupational health and safety measures will be in place.

No issue was reported.

Involuntary Resettlement

According to the initial assessment, installation of the 61-kilometer gas pipeline required acquisition and requisition of 50.6596 hectares and 105.7659 hectares of land. This impacts have been minimized to total 16.57 acres of land in two sites. All land acquisition related activities for these sections have been completed within 2014. For component A-2; installation of compressor in Elenga, the land belongs to RPGCL. There would be no land acquisition or resettlement impacts. Only the documents need to be handed over. This part is being financed by the Government and GTCL ensures that civil works are completed during the dry season to avoid disrupting crops on the temporarily acquired land and the Government is committed to undertake efforts to minimize adverse impacts.

For part B, the initial sites were found less feasible based on the 3-D seismic survey. New sites are selected in (i) Chhatian, Jangilsar, Malihata & Suhilpur mauzas under Sadar upazila (well no. 25, 26), and (ii) Sarail mauza under Sarail Upazila (Well no 23, 24) within Brahmanbaria district. A total of 14.9935 acres of land has been acquired with impact on 66 households. In addition to due compensation, 40 project affected people have been employed during drilling in project construction site and 11 of them have received casual employments.

Part C, construction of distribution pipelines in south western region has been revised with some scope changes. The changes have been proposed from the government. It is subject to further deliberation.

The component D is installation of prepaid meters. This will not trigger any involuntary resettlement issues.

Indigenous Peoples As 100% of the affected people were surveyed and no indigenous households was affected by the project, the project was classified category C, and no indigenous peoples development plan is required.
Stakeholder Communication, Participation, and Consultation
During Project Design To ensure proper community participation, various stakeholders representatives of vulnerable groups, local leaders, and mayors were consulted during the project preparation. The gas companies undertook consultations with local officials and village leaders in the project area. These consultations played a vital role in raising awareness, gaining local support, and enabling affected people to voice their opinions and suggestions on project design and implementation. The poor and women have been carefully considered in conducting participatory activities. As part of the social assessment, stakeholders' consultations were carried out in the project areas with the broad objective of ensuring the extensive participation of all stakeholders. The participatory approach will be continued during implementation.
During Project Implementation During project implementation stakeholders' consultation is being carried out as and also will continue if required.
Business Opportunities
Consulting Services For project components under Parts A and B, consulting services to technically assist EAs to implement the Project will be required. Consulting services for the project component under Part C will not be required. Part D will need consulting services for the subproject on developing a portfolio of projects on energy efficiency improvement. EAs will select and engage consulting firms in accordance with the ADB's Guidelines on the Use of Consultants using the quality and cost based selection method and full technical proposal. Individual experts may also be recruited based on bio-date submitted in response to specific terms of reference for assignments.
Procurement All procurement to be financed under the ADB loan will be carried out in accordance with ADB's Guidelines on Procurement 2007 (as amended from time to time).
Responsible ADB Officer Nahar, Nazmun
Responsible ADB Department South Asia Department
Responsible ADB Division Bangladesh Resident Mission
Executing Agencies
Bangladesh Gas Fields Company Ltd.
*Mr. Md. Nurul Islam
[email protected], [email protected]
Birashar, Brahmanbaria - 3400, Bangladesh
Gas Transmission Company Ltd.
*Mr. Md. Aminur Rahman
[email protected], [email protected]
Red Crescent-Borak Tower, Level 6, 71-72, Old Elephant Road (Eskaton), Dhaka - 1213, Bangladesh
Sundarban Gas Company Limited (SGCL)
*A.B.M. Nazmul Hasan
[email protected]
Petrocenter, 13th Floor, 3, Kawran Bazar Commercial Area, Dhaka - 1215, Bangladesh
Titas Gas Transmission & Distribution Co. Ltd.
*Mr. Md. Abdul Aziz Khan
[email protected], [email protected]
105, Kazi Nazrul Islam Avenue, Kawran Bazar Commerical Area, Dhaka - 1215, Bangladesh
Timetable
Concept Clearance 06 May 2009
Fact Finding 11 May 2009 to 20 May 2009
MRM 08 Dec 2009
Approval 26 Mar 2010
Last Review Mission -
PDS Creation Date 18 Jan 2010
Last PDS Update 27 Sep 2017

Loan 2622-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Mar 2010 03 Jun 2010 16 Mar 2011 30 Sep 2015 30 Dec 2018 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 537.00 Cumulative Contract Awards
ADB 261.00 26 Mar 2010 220.66 0.00 85%
Counterpart 276.00 Cumulative Disbursements
Cofinancing 0.00 26 Mar 2010 217.77 0.00 83%

Loan 2623-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Mar 2010 03 Jun 2010 16 Mar 2011 30 Sep 2015 - 05 Jan 2017
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 5.00 Cumulative Contract Awards
ADB 5.00 26 Mar 2010 1.40 0.00 99%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 26 Mar 2010 1.41 0.00 100%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Natural Gas Access Improvement Project - Part B, Safety and Supply Efficiency Improvement in Titas Gas Field: Environmental Monitoring Report (January-June 2017) Environmental and Social Monitoring Reports Sep 2017
Natural Gas Access Improvement Project - Part B, Safety and Supply Efficiency Improvement in Titas Gas Field: Social Monitoring Report (July-December 2016) Social Monitoring Reports Jan 2017
Natural Gas Access Improvement Project - Part B, Safety and Supply Efficiency Improvement in Titas Gas Field: Environmental Monitoring Report (January-December 2016) Environmental Monitoring Reports Dec 2016
Natural Gas Access Improvement Project - Part B, Safety and Supply Efficiency Improvement in Titas Gas Field: Environmental Monitoring Report (January-December 2015) Environmental Monitoring Reports Apr 2016
Natural Gas Access Improvement Project: Part A - Ashuganj Compression Station Subproject Environmental Monitoring Report (January-December 2015) Environmental Monitoring Reports Jan 2016
Natural Gas Access Improvement Project: Part A - Elenga Compression Station Subproject Environmental Monitoring Report (January-December 2015) Environmental Monitoring Reports Jan 2016
Natural Gas Access Improvement Project - Part B, Safety and Supply Efficiency Improvement in Titas Gas Field: Social Monitoring Report Social Monitoring Reports Dec 2015
Natural Gas Access Improvement Project: Part B Titas Gas Field Social Monitoring Report (January-June 2015) Social Monitoring Reports Jun 2015
Natural Gas Access Improvement Project: Titas Gas Field Initial Environmental Examination Initial Environmental Examination Sep 2013
Natural Gas Access Improvement Project: Gas Seepage Control and Appraisal & Development of Titas Gas Field - Resettlement Plan (September 2013) Resettlement Plans Sep 2013
Natural Gas Access Improvement Project: Ashuganj and Elenga Compressor Stations Installation Initial Environmental Examination Initial Environmental Examination Apr 2011
Natural Gas Access Improvement Project: Gas Distribution Network Project Resettlement Plans Dec 2009
Natural Gas Access Improvement Project: Gas Seepage Control and Appraisal and Development of Titas Gas Field Resettlement Plans Dec 2009
Natural Gas Access Improvement Project: Gas Seepage Control and Appraisal and Development of Titas Gas Field Resettlement Plans Dec 2009
Natural Gas Access Improvement Project: Proposed Ashuganj-Bakhrabad Loop Line Resettlement Plans Jul 2009

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications


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