KEPZ power plant not commissioned due to gas scarcity

The fate of a 50-MW gas-fired power plant in Karnaphuli Export Processing Zone is hanging in the balance as various government agencies debate on gas prices while Petrobangla is unable to supply enough gas to the plant.

The power plant was supposed to be launched in 2019, but uncertainty about incessant gas supply and bureaucratic bottlenecks have sent this station into a vegetative state.

The executive chairman of the Bangladesh Export Processing Zones Authority (BEPZA), Major General Md Nazrul Islam wrote a letter to the senior secretary of Energy and Mineral Resources Division on June 6, asking him to launch the plant.

Officials said due to lack of adequate electricity, various tools and machines in the EPZ are getting obsolete. There are some 50 foreign and local factories operating in KEPZ. They are purchasing power from Bangladesh Power Development Board and Chittagong Export Processing Zone, respectively. The factories face fluctuation in voltages and other difficulties due to lack of an exclusive power station on the KEPZ premises.

Asked, Mohammad Enamul Haque, general manager of Karnaphuli EPZ told Business Insider Bangladesh that senior government officials are aware of the fact. “As far as I know, a letter has already been sent to the concerned department, asking for a necessary supply of gas to the plant.”

He said some new factories will be launched in the near future and some old factories will go for overhauling and expansion. Therefore, the demand for electricity will rise. “This is why this plant has been set up. An incessant supply of electricity is needed for the continuous production in the EPZ,” he said.

However, senior officials of United Group declined to comment.

Badrul H Khan, the company secretary of United Power and Distribution Company Limited, was contacted on his mobile phone on Tuesday. He told Business Insider Bangladesh that he was in a meeting. When this correspondent rang him several times after the meeting, he did not pick up his mobile phone.

An official of BEPZA, requesting anonymity said the gas connection could not be provided as asked due to complications over which category of gas (as per price slot) would be supplied to the plant.

On 19 August 2018, BEPZA and Messrs. Leviathan Global BD Limited signed a Power Supply Agreement (PSA) to set up a 40 to 50 MW gas-fired power plant in the KEPZ.

According to the agreement, the plant was supposed to be commissioned commercially within a year. But the plant has failed to run in three years. It is worth citing here that that Leviathan Global BD Limited is a sister concern of the United Group.

In a meeting chaired by the Secretary to Energy and Mineral Resources in January 2018, it was decided that a portion of the electricity will be added to the national grid which could be sold at Import Parity Price and a portion will be sold to the EPZ customers that could be considered as captive.

In another meeting, the stakeholders did not reach a consensus if or not to consider the power as captive because it is meant for sale to the outside clients (national grid) instead of exclusive use by the KEPZ factories.

However, the Power Division did not give its opinion till the filing of this report.

Petrobangla officials, meanwhile, said they were uncertain about the supply of gas even though they were allowed to supply it at Import Parity Price.

An official said the current demand for gas is 2.5 million cubic feet per day in the country but its supply is much below that of the demand.

Petrobangla's gas supply report of 26 July shows that 2,252 million cubic feet of gas was produced on this day of which 1,225 million cubic feet were provided to power generation companies.

They said even after the import of LNG, it has become difficult to supply gas to gas-fired power plants. In this case, supply of gas to the new plant should be based on rationality.