Controversy of Muchai Gas Pipeline Compressor Station of GTCLEngr. Khondkar A Saleque
One Bangladesh Daily now being spearheaded by Engr. Mahmudur Rahman ex Energy Advisor to PM Khaleda Zia and now columnist recently carried out a report on alleged corruption in the deal with IOC Chevron regarding installation of a Gas Pipeline Compressor Station on GTCL operated national Gas Grid. The report indicated an alleged 5 Million Us $ financial scam against son of PM Hasina Sajib Wajed Joy and his Energy Advisor Dr Tawfique-E–Elahi Chowdhury. The report quoted unidentified Petrobangla officials making the allegation using Petrobangla letter head pad. Petrobangla and EMRD sources have already refuted that allegation. Dr Tawfique also expressed surprise and indicated his intention to deal with that matter legally. The matter has got further spices as leader of the opposition also got involved through making a statement condemning alleged threat to Engr Mahmudur by two ministers for printing the report.
In a democratic country, in a free society any one has right to express opinion on any issue. But media must check and publish news after proper verifications. When such allegations are made against senior policy makers they should be heard before printing such sensitive news. We are not aware whether these were done. On the other hand ministers or government officials can always issue rejoinders and take legal actions.
The allegations against PM Hasina's son Joy has been made at a time when a section of political leaders are discussing the BNP decision to make ex PM Khaleda's son Tareq the senior Vice chairman of BNP. Several reports are appearing in media about many alleged acts of corruption of Hawa Bhaban which used to be the seat of corruption during BNP- Jamat rule. The report was also published at a time When Dr Tawfiq was busy with a Bangladeshi Road Show seeking investment for Energy sector in London.
This purpose of this write up is not defending or alleging any one. This author initiated the Gas Pipeline Compressor station Project of GTCL in 2004 as Director (Operation) and Project Manager. Some issues of controversy are being discussed here.
Chevron or any other US company can not bribe any company anywhere as per business ethics. Think of Enron Scandal in India, think of Seimens scandal world over.US auditing system will unearth any wrong doings and the company concerned will have serious damage to its business. Since a Bangladeshi newspaper has raised this issue it will be definitely dealt with appropriately. Persons concerned against whom the allegation has been made may also take legal recourse if they have sufficient grounds to defend themselves.
But considering the sensitivity of the matter let us try to discuss the matter in some depths.GTCL is a 100% Bangladesh government owned company entrusted to build , own, operate and maintain all Gas transmission pipelines and ancillary facilities. It has natural monopoly of Gas Transmission in Bangladesh. Since formation in 1993 it has taken over transmission assets from other companies and is operating national gas grid. It has implemented and is implementing several gas transmission infrastructures.GTCL evacuates Gas from all production Companies (National or IOCs) and transports through its grid to downstream Distribution Companies. The battery limit of production companies are the downstream flanges of Custody Transfer metering stations. Beyond these the production companies have no scope to infringe GTCL premises.
Chevron like other IOCs can explore and develop any gas prospect in its assigned blocks under Production Sharing Contracts (PSC) with Petrobangla and Government of Bangladesh. GTCL or any other PB company have no contractual link with Chevron or any IOC.Gas produced by IOCs is traded with Petrobangla under specific Gas Purchase and Sales Agreement (GPSA) applicable for a particular gas field. IOCs explore and develop Gas fields under cost recovery which is made from Petrobangla share of Gas from the field included in PSC and GPSA. IOCs make upfront investment in survey, exploration and development of gas fields. They may construct sales line to deliver gas to designated locations of national gas grid. Chevron built such sales lines in Jalalabad, Moulavibazar and Bibiyana Gas Field under cost recovery.
GTCL in 2004 using gas system simulation software acquired from Cairn through PB carried out extensive simulation work of national gas grid in the wake of gas transmission crisis. It was found that system upgrading would be essential by 2008 to evacuate possible additional gas available from greater Sylhet areas for transmission to expanding gas markets in South East, North West and Central Areas of Bangladesh. Several gas transmission pipelines and three Pipeline Compressor stations were identified. At that stage Moulavibazar Gas field was under development and talks on Bibiyana development was at matured stage.
We, ten Gas Engineers (6 no longer in Bangladesh Gas Sector) were exposed to Gas Transmission technology during 12 weeks training on Gas Transmission with leading West European Gas Transmission Company Gasuine BV, the Netherlands in 1988. Later in 1995 we also visited some major Compressor stations in Alberta Canada. In 2003 we visited Williams operated Compressor station in Washington and in 2004 we spent a day in PETRONAS Compressor station in Kualalampoor.Based on our experience and analysing the comparative cost and benefits of Compressor stations and additional loop lines we struggled to convince very naïve PB management at that time to opt for three compressor stations at Muchai, Ashuganj and Elenga. The Compressor stations were required to be operational by April 2008. ADB engaged consultant also endorsed our recommendation. It was included in ADB funded Gas Sector Development Project. Engr Mahmudur Rahman must have thorough knowledge of it. This author explained to him the utility of Pipeline Compressor stations at a presentation in Ashuganj Gas Manifold Station SCADA control room in July 2005.Unfortunately this author could not continue working in GTCL beyond August 2005 due to naked politicization of energy sector management.
GTCL management and PB struggled with Compressor project. In 2006 some acts of manipulations in its tendering process was identified and ADB forced government to cancel the bid and go for retender. The prolonged tendering process took several years. By early 2009 GTCL was in a position to award the works to the evaluated lowest bidder Hyundai, Korea. But their quoted price was about 2.8 times of GTCL estimate. A section of PB officials were not in favour of awarding this tender to technically qualified lowest bidder. But they were keen to procure very expensive line pipes for other components of the project. As downstream pipelines without setting up compressor stations would not serve any purpose sensible professionals suggested to redirect some money that could be saved from line pipe purchase through implementing pipeline projects in phases and redirect fund to compressor project.
Unfortunately one identified corrupt senior executive of gas sector was very keen to buy expensive pipes rather than to invest on urgent compressor stations. Fair and Honest PB Chairman Mr Jalal Ahmed who was not in the game was removed to create situation for the corrupt official take control. GTCL board meeting saw divided opinion. In the very first meeting chaired by that identified corrupt official GTCL proposal to ward Compressor project to evaluated lowest bidder was cancelled. In the meantime that official utilising his official capacity obtained a proposal from Chevron to build Muchai Compressor station under Cost recovery.
There were several media reports stating the wrong doing. PSC does not authorise IOCs to build any transmission facility beyond its battery limit.GTCL has no contractual dealings with IOCs. Moreover the estimated cost of Chevron proposed Compressor station at Muchai is relatively higher. Recommendations of project consultant and GTCL committee were ignored.
Despite all above the controversial proposal to allow Chevron build a GTCL component of a project was approved. Compressor station at Muchai if built by 2008 was justified. Gas transmission by this time would have tuned with downstream market demand pattern. It could improve delivery pressure and evacuate stranded gas over the last two years to benefit downstream. But the present situation does not warrant the requirement of such expensive station at Muchai at all.
Cost of steel at world market has gone down significantly after 2008 Beijing Olympics. If line pipes were tendered after 2008 Bangladesh could buy pipes at much lower price. But some smart people took the nation for a ride.
We can not believe that advisor to PM and PM's son can be bribed by Chevron. But some person somewhere must have been benefitted in some way in the entire episode of failed Gas Transmission Development Project of ADB. For transparency, the entire issue may be investigated. Media should also act responsibly to dig out the wrong doing in this deal.
Failure of GTDP project as per original implementation schedule is mainly responsible for present massive gas crisis – energy crisis. Properly structured national committee must investigate the reasons of the failure and punish the mischief mongers.
http://www.energybangla.com/index.php?mod=article&cat=GasSector&article=2311
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Bangladesh's State-run BAPEX to Get Two New Rigs by 2010 (12.01.2009) Confusing Statement on gas Reserve in Bibiyana may Mislead Policymakers: Chevron (11.26.2009) Titas Gas Field Breathing Fire (11.24.2009) Petrobnagla Refuses Chevron's Reserve Estimate (11.22.2009) Bangladesh Set to Install Pre-paid Gas Meters in Domestic Areas (11.19.2009) Dipon Gas Wins International Star Award for Quality in Geneva (11.16.2009) Deep Sea Exploration: Govt Yet to Get Feedback from IOCs (11.15.2009) Managing Gas Production Crisis In Bangladesh (11.12.2009) Gas Bill Placed in Bangladesh Parliament (11.03.2009) Large RMG Units Facing Production Setback Due to Low Pressure of Gas (10.31.2009)
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