Bangladesh Power Board Mulls Buying Gas From Santos' Sangu-II Well

Bangladesh Power Development Board (BPDB) is likely to purchase gas directly from the offshore Sangu-II well belonging to Santos at a higher rate for its power plants, Financial Express Bangladesh reported.

The state owned firm expects the deal to be inked with the Australia energy company shortly. The report said citing an official that gas pricing issue is still under discussion.

Santos has set $4.50 per unit as the baseline price for its gas from Sangu-11, which is 55 per cent higher than the price of $2.90 per unit that it gets from Petrobangla. The company found commercially viable gas reserves in the Sangu-II well, which it had drilled in block-16 in the Bay of Bengal, in mid-February this year.

The Australia firm is the only international energy company in Bangladesh that is allowed to sell natural gas directly to private buyers at market prices from its new offshore fields in block-16.

All other international oil companies have to sell their gas to state-owned Petrobangla, which then sells it to state-owned gas distribution companies to reach it to end-users.

Sangu is now producing around 9.0 mmcfd of gas, which is around 4.0 per cent of the field's peak output of around 220 mmcfd in 2006 when Shell was its operator.