A promising export item

With production outpacing demand, Bangladesh has resumed exporting Natural-gas Condensate (NGC), a combustible by-product of natural gas, since August last year after a four year break.
As of now, two consignments of NGC, each amounting to 1,20,000 barrels, have been exported, earning the Government a total revenue of Tk.94.67 crore. A tender for a new consignment has been floated to export 120,000 barrels of gas condensate in May 13-15, which will be loaded from Chittagong
Experts and stakeholders concerned, however, said that this amount could have been multiplied by exporting petrol or octane instead of NGC.
Sources with Petrobangla said that the decision to restart the export of NGC was taken to ensure uninterrupted production of natural gas in different gas fields across the country. The country’s annual production of condensate increased over 70 per cent, mainly after Chevron Bangladesh set up a Liquid Recovery Unit at Bibiyana Gas Field, towards the end of 2014. Bibiyana has a storage capacity of 72,000 barrels of condensate, but the production increased to around 73,400 barrels
In the 2014-15 financial year, state-owned as well as international oil companies extracted around 321,000 tonnes of condensate, and the quantity increased to 360,000 tonnes the following fiscal. The Energy Division has estimated that the extraction of condensate would rise to 560,000 tonnes in 2016-17.
The country’s demand for petrol and octane, however, remained the same, at less than 350,000 tonnes per annum, due to the use of compressed natural gas, or CNG, in private cars, pickup vans, buses and auto rickshaws, in the big cities, including Dhaka, Sylhet and Chittagong. Usually, motorbikes and private cars run on petrol and octane.
Besides, some private petrochemical companies were importing condensate instead of purchasing it from local sources. This has resulted in stockpiling of condensate, according to a Petrobangla official.

Exporting at lower prices
The BPC floated the tender on July 16, 2015, which was bagged by the global energy giant Olive. Olive bought 120,000 barrels of condensate at USD 0.38 less than the international price of a barrel of naphtha in August 25. The Government earned around Tk.50 crore from that export.
After the BPC floated the schedule, six companies bought it, but only Trafigura and Olive Group submitted bids. Trafigura wanted to buy a barrel of condensate at USD 3.95 less than the international price of a barrel of naphtha, whereas Olive wanted to buy it at a price that was USD 0.38 lower.
In December last year, the Government exported another 1,20,000 barrels of condensate to the Singapore-based Trafigure at a discount of $1.95 per barrel. Interestingly, Olive, which had earlier purchased the first consignment in August, asked for a $3.25 discount per barrel. The government had earned Tk.44.67 crore from the export.
Talking to The Independent, Mosleh Uddin, the BPC Director of Planning and Operations, said that the condensate was exported for Tk.22-26 a litre based on its international price and conversion rate of the US dollar and taka. The BPC sells condensate to eight local private refineries for Tk 40-42 per litre.
Besides, Petrobangla buys it at Tk 36.93 per litre from the US company Chevron Bangladesh, which alone extracts nearly 85 per cent of the total daily supply, he added.
When asked why condensate was exported at a discounted price, Mosleh Uddin said that the BPC usually collects condensate as a by-product from different gas-fields owned and operated by different subsidiary companies of the state-run Petrobangla and international oil companies (IOCs).
“The production of condensate was way more than our storage capacity. Even after meeting the local demand, a huge amount remains unutilised and we have no option but to go for exports. So, in that sense, such condensate exports have proven to be lucrative for the Government,” he said. When asked, how long this would continue, the BPC Director said that Petrobangla would take a call on that.
Jamil A Alim, the Petrobangla Director of Operations, said that exports will continue until the capacity of the refineries can be expanded. “With increased gas production, condensate production is going to be increased, too. Unless we can store that condensate, we have no option but to go for export,” he said.
Alim also said that the BPC had earlier exported condensate only for three years from 2009 until 2011. Around 18 parcels were exported at the time.
Other options
When asked about the possibility of exporting petrol and octane made from the condensate instead of directly exporting the condensate at a discounted price, the Petrobangla Director said that they are thinking about that option. “That’s a long shot,” he said.
Interestingly, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said that Bangladesh can become an oil exporting nation. He also had several meetings in the ministry about producing fuel oil, including petrol, octane and jet fuel, from the condensate for exports instead of exporting NGC.
Nasrul Hamid recently had a meeting with a delegation from the United Arab Emirates (UAE), comprising UAE Ambassador to Bangladesh, Dr Saeed Bin Hajar, Al-Shehi Saif Humaid Al Falsi, Group CEO of Emirates National Oil Company (ENOC), and Moiz Salim, General Manager of the Singapore office of ENOC, who expressed their interest in working with Bangladesh to produce jet fuel from condensate by using newer technology.
Talking to The Independent, Nasrul Hamid said that producing jet fuel from condensate is possible and Bangladesh will seriously think about a partnership with the UAE in producing that. “If that is to be done on an industrial scale, the condensate will have to be imported because what we have will not be able to meet the demand,” said the State Minister.
Energy expert Dr M Tamim, however, said that condensate could have been used to meet the local demand instead of being exported. “We can establish world class refineries here and produce octane from it. That octane could be consumed locally in private vehicles, which will relieve the pressure on CNG,” he said.

 

A promising export item

With production outpacing demand, Bangladesh has resumed exporting Natural-gas Condensate (NGC), a combustible by-product of natural gas, since August last year after a four year break. As of now, two consignments of NGC, each amounting to 1,20,000 barrels, have been exported, earning the Government a total revenue of Tk.94.67 crore. A tender for a new consignment has been floated to export 120,000 barrels of gas condensate in May 13-15, which will be loaded from Chittagong Experts and stakeholders concerned, however, said that this amount could have been multiplied by exporting petrol or octane instead of NGC. Sources with Petrobangla said that the decision to restart the export of NGC was taken to ensure uninterrupted production of natural gas in different gas fields across the country. The countrys annual production of condensate increased over 70 per cent, mainly after Chevron Bangladesh set up a Liquid Recovery Unit at Bibiyana Gas Field, towards the end of 2014. Bibiyana has a storage capacity of 72,000 barrels of condensate, but the production increased to around 73,400 barrels In the 2014-15 financial year, state-owned as well as international oil companies extracted around 321,000 tonnes of condensate, and the quantity increased to 360,000 tonnes the following fiscal. The Energy Division has estimated that the extraction of condensate would rise to 560,000 tonnes in 2016-17. The countrys demand for petrol and octane, however, remained the same, at less than 350,000 tonnes per annum, due to the use of compressed natural gas, or CNG, in private cars, pickup vans, buses and auto rickshaws, in the big cities, including Dhaka, Sylhet and Chittagong. Usually, motorbikes and private cars run on petrol and octane. Besides, some private petrochemical companies were importing condensate instead of purchasing it from local sources. This has resulted in stockpiling of condensate, according to a Petrobangla official. Exporting at lower prices The BPC floated the tender on July 16, 2015, which was bagged by the global energy giant Olive. Olive bought 120,000 barrels of condensate at USD 0.38 less than the international price of a barrel of naphtha in August 25. The Government earned around Tk.50 crore from that export. After the BPC floated the schedule, six companies bought it, but only Trafigura and Olive Group submitted bids. Trafigura wanted to buy a barrel of condensate at USD 3.95 less than the international price of a barrel of naphtha, whereas Olive wanted to buy it at a price that was USD 0.38 lower. In December last year, the Government exported another 1,20,000 barrels of condensate to the Singapore-based Trafigure at a discount of $1.95 per barrel. Interestingly, Olive, which had earlier purchased the first consignment in August, asked for a $3.25 discount per barrel. The government had earned Tk.44.67 crore from the export. Talking to The Independent, Mosleh Uddin, the BPC Director of Planning and Operations, said that the condensate was exported for Tk.22-26 a litre based on its international price and conversion rate of the US dollar and taka. The BPC sells condensate to eight local private refineries for Tk 40-42 per litre. Besides, Petrobangla buys it at Tk 36.93 per litre from the US company Chevron Bangladesh, which alone extracts nearly 85 per cent of the total daily supply, he added. When asked why condensate was exported at a discounted price, Mosleh Uddin said that the BPC usually collects condensate as a by-product from different gas-fields owned and operated by different subsidiary companies of the state-run Petrobangla and international oil companies (IOCs). The production of condensate was way more than our storage capacity. Even after meeting the local demand, a huge amount remains unutilised and we have no option but to go for exports. So, in that sense, such condensate exports have proven to be lucrative for the Government, he said. When asked, how long this would continue, the BPC Director said that Petrobangla would take a call on that. Jamil A Alim, the Petrobangla Director of Operations, said that exports will continue until the capacity of the refineries can be expanded. With increased gas production, condensate production is going to be increased, too. Unless we can store that condensate, we have no option but to go for export, he said. Alim also said that the BPC had earlier exported condensate only for three years from 2009 until 2011. Around 18 parcels were exported at the time. Other options When asked about the possibility of exporting petrol and octane made from the condensate instead of directly exporting the condensate at a discounted price, the Petrobangla Director said that they are thinking about that option. Thats a long shot, he said. Interestingly, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said that Bangladesh can become an oil exporting nation. He also had several meetings in the ministry about producing fuel oil, including petrol, octane and jet fuel, from the condensate for exports instead of exporting NGC. Nasrul Hamid recently had a meeting with a delegation from the United Arab Emirates (UAE), comprising UAE Ambassador to Bangladesh, Dr Saeed Bin Hajar, Al-Shehi Saif Humaid Al Falsi, Group CEO of Emirates National Oil Company (ENOC), and Moiz Salim, General Manager of the Singapore office of ENOC, who expressed their interest in working with Bangladesh to produce jet fuel from condensate by using newer technology. Talking to The Independent, Nasrul Hamid said that producing jet fuel from condensate is possible and Bangladesh will seriously think about a partnership with the UAE in producing that. If that is to be done on an industrial scale, the condensate will have to be imported because what we have will not be able to meet the demand, said the State Minister. Energy expert Dr M Tamim, however, said that condensate could have been used to meet the local demand instead of being exported. We can establish world class refineries here and produce octane from it. That octane could be consumed locally in private vehicles, which will relieve the pressure on CNG, he said.