Bangladesh Next Gas Block Bidding Round in October
Bangladesh has decided to begin the bidding process for its offshore gas blocks in October. The government has finalised the model production sharing contract (PSC) raising prices for the natural gas. Gas prices are pegged to high sulfur fuel oil (HSFO) prices in Bangladesh.
The Financial Express has reported that floor price for HSFO was raised to $100 per tonne and the ceiling price set at $200 per tonne so gas price would be around $5.00/Mcf based on the proposed pricing formula. In the 2008 bidding round, the floor price for HSFO in the formula was fixed at $70/tonne and the ceiling price at $180/tonne. Then the gas price was around $2.90-$2.95/Mcf.
In the forthcoming round, Bangladesh would be offering 12 offshore gas blocks, nine in shallow water and three in deep water, in the Bay of Bengal. This will be the country's fourth bidding round following those in 2008, 2001 and 1997.
No block was specified or created as yet for the bidding. Only the undisputed area and the areas settled with Myanmar would be included in the bidding jurisdiction, he said. But two discovered gas fields - Kutubia and Teknaf - have been kept in the bidding as 'ring-fenced', sensing its special prospects, the newspaper said citing a government official.
Exploration period for shallow water gas blocks would be seven years instead of previous eight years and for deep water it would be eight years instead of previous nine years, the official said.