Feasibility study of gas supply to Rajshahi

Abstract

The gas fields in Bangladesh discovered so far discovered arc located in the Eastern Part of the country. As a result gas based power plants, fertilizer factories and industries have been set up only in the Eastern Part of the country. Non-availability of natural gas is the major obstacle 10set up industries in the northern region, especially In the divisional city Rajshahi and its adjacent areas. As a result expected development has not been achieved In the northern part. Major objectives of this project arc to study the feasibility of gas pipeline to divisional city Rajshahi which includes design, financial and economic aspects. The study reviews the present gas supply, demand, transmission scenario l\lld also analyzes forecasted production, supply, demand and transmission plan. The study also identifies the limitations of gas supply to divisional city Rajshahi .. Financial parameters such as Net present Value (NPV), Benefit-Cost Ratio (BCR) and Internal Rate of Return (1RR) has been calculated on the hasis of 20 years project life. The analysis is firstly done on the basis of present postage stamp method of wheeling charge. The result of financial analysis shows that NPV, BCR and IRR for base case are Tk. (656.692) million, 0.78 and 13% respectively. The same for pessimistic case are Taka (1690:746) million, 0.43 and 7.65% respectively. For optimistic case these values are Taka 294.611 million, 1.10 and 16% respectively. The result shows that by applying postage stamp method of wheeling charge the project is financially viable only for optimistic case. The result of economic analysis shows that the project is economically viable for base case and optimistic case and not viable for pessimistic ease. On the other hand, if revenue is calculated on distance based wheeling charge then the project is financially viable for base case and optimistic case and economically viable for all cases. Sensitivity analysis shows that the project viability largely depends on the power sector gas demand. With power sector minimum demand the project in not financially viable even with other sectors maximum demand, On the other hand with power sector maximum demand the project is financially viable even with other sectors minimum gas demand.