Bangladesh has resumed piped natural gas connections to households from Wednesday -- after nearly three years -- amid increasing illegal connections and repeated pleas from affected stakeholders, including the real estate industry, Energy Secretary Mozammel Haque Khan told Platts Wednesday.
"Gas connections to households start again from Wednesday as Prime Minister Sheikh Hasina has ordered the resumption of new connections," Khan said.
Gas will be diverted from some power plants and fertilizer plants, and made available to households, he said, noting that additional gas will also come from Gazprom's newly-drilled onshore Srikail-3 well -- which is expected to begin producing mid-May.
The government had halted piped natural gas connections to households in July 2010 -- due to a gas shortage in the country -- promising at the time to restart connections when overall gas supply reached 2.2 Bcf/d. It then prioritized gas supply to power plants and fertilizer factories.
Khan said that around 15,000 Mcf/d of gas has been earmarked for new household gas connections, adding that households which have made deposits for gas connections will get priority.
The government will also legalize the illegal gas connections, after imposing fiscal penalties in line with the Gas Distribution Rule 2004, he said.
There are some 58,000 illegal household gas connections across the country, consuming around 6,000 Mcf/d of gas, he said.
One industry observer told Platts that upcoming municipal elections in four cities, scheduled for June 15, might have prompted the government to lift the ban on household gas connections.
In addition, members of the public have long been demanding new piped gas connections, and the Real Estate & Housing Association of Bangladesh has said the ban has affected the sale of new flats and caused construction activity to slow.
When the government stopped piped gas connections to households in 2010, it had said at the time it would look into bringing LPG prices more in line with piped natural gas prices to households.
This, however, has yet to happen.
Currently a 12.5 kg LPG cylinder is being sold at around Taka 1,600, while a double-burner piped gas connection costs Taka 450 each month. A six-member family requires at least two 12.5 kg LPG cylinders, and thus has to spend around Taka 3,200/month -- more than seven times the monthly cost of piped gas, said one consumer.
Households currently consume around 264,000 Mcf/d of gas, or 12% of the country's average production of 2.2 Bcf/d, an official with state-owned Petrobangla told Platts.
In April 2012, the energy ministry resumed new gas connections to industries on selective basis, following a ban in June 2009.
Bangladesh is currently facing an acute gas crisis with the shortfall of over 500,000 Mcf/d, with the energy ministry estimating demand at 2.7-3 Bcf/d against the current supply of 2.2 Bcf/d.
