KGDCL committed to fulfil people’s demand of gas in greater Chittagong – Jameel A Aleem

--Interview by Nazim U Chowdhury and Meer Mesbah Ahmed

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The Karnaphuli Gas Distribution Company Limited (KGDCL) has been founded based on a political commitment of major political parties and a long-time demand of the people of Chittagong and greater Chittagong within the framework of decentralization policy of the government, said Jameel A Aleem, Managing Director, KGDCL in an exclusive interview with The Guardian.

In this context, the Managing Director said that realizing the spirit of its foundation, KGDCL is committed to fulfil people’s demand of gas in greater Chittagong region, adding that through its inauguration on 1st July 2010 by Honourable Prime Minister of the People’s Republic of Bangladesh, Sheikh Hasina, M.P., KGDCL has been taking necessary measures one after another under the guidance of the Ministry of Power, Energy and Mineral Resources of the Government to meet the demand of the people.

As a matter of fact, he mentioned that the KGDCL purchased a sum total of 2172.80 mmcm volume of gas during FY 2011-2012 where the purchase from government-owned Bangladesh Gas Field Company Limited (BGFCL), Sylhet Gas Field Limited (SGFL) and BAPEX were 591.86, 36.25 and 93.11 mmcm respectively totaling to 721.22 mmcm and through Petrobangla from International Oil Company Sangu, Bangura and Jalalabad Gas Field was 1451.58 mmcm.

He, in this context, further mentioned that KGDCL distributed the quantity of gas in the previous FY 2011-2012 was 2315.53mmcm and FY 2010-2011 it was 2347.87mmcm, adding that among the users of these quantities of gas there are  bulk customers like Shikalbaha Power sstation (SPS), Usmania Glass Sheet Factory Ltd (UGSFL), 210 MW Thermal Power Station, Eastern Refinery Ltd. (ERL), Tripple Super Phosphate (TSP), Chittagong Urea Fertilizer Ltd. (CUFL), Karnafuli Fertilizer Company Ltd (KAFCO), DAP including the non-bulk customers Captive Power, CNG, Industrial, Commercial and Domestic users.

In reply to a particular question, the Managing Director said that as a new company of course it has shortages of institutional aspects like physical infrastructures, manpower and other relevant issues. But, informed us that the present government is very much cordial to the developmental affairs of KGDCL and a good number of initiatives are already taken to improve the overall condition of KGDCL.

When asked to disclose about the future plans of the company, he said that huge development programmes are planned to improve the scenario of KGDCL and to ensure gas supply scenario for Chittagong region and after the implementation of all those programmes, KGDCL will not change, rather the life of greater Chittagong region will change.

 

In an exclusive interview, a high profile expert in energy, Mr. Aleem replied to several questions covering the entire activities, contributions, problems, potentials and future plans of KGDCL, including different other issues concerned with KGDCL and greater Chittagong region. His deliberations are quite interesting, highly informative and educative as well. The excerpts of his valuable interview are produced here below for The Guardian readers at home and abroad:

The Guardian: Please give us a short introduction to the founding history of Karnaphuli Gas Distribution Company Limited (KGDCL)?

Managing Director: Karnaphuli Gas Distribution Company Limited (KGDCL) is a newly formed Company under ‘The Companies Act 1994′ and registered under Joint Stock Companies and Firms. In 2010 former Bakhrabad Gas Systems Limited (BGSL) was bifurcated by the Government of the People’s Republic of Bangladesh forming two new companies named Bakhrabad Gas Distribution Company Limited (BGDCL) and Karnaphuli Gas Distribution Company Limited (KGDCL).

The companies were formed through a Gazette Notification dated 11th November 2008 of the Ministry of Power, Energy and Mineral Resources of the Government of the People’s Republic of Bangladesh. KGDCL started its revenue activity from 1st July 2010. Honourable Prime Minister of the People’s Republic of Bangladesh, Sheikh Hasina, M.P., formally inaugurated the opening ceremony on 8th September 2010.

The Guardian:  In this context, would you discuss the reasons behind the foundation of KGDCL although there are a number of already established public gas distribution companies in the country?

Managing Director: The reason behind the foundation of Karnaphuli Gas Distribution Company Limited (KGDCL) was a political commitment of major political parties and a long-time demand of the people of Chittagong and greater Chittagong within the framework of de-centralization policy of the government. As 75% of the revenue came from Chittagong area and the Head Office of BGSL was located in Comilla, the customers of Chittagong region suffered to get early decision. Hence for earlier and greater services to the customers a new separate company was formed.

The Guardian: Please mention the quantity and sources of gas distribution of KGDCL each year?

Managing Director: The quantity of gas distribution of KGDCL in the previous FY 2011-2012 was 2315.53mmcm and FY 2010-2011 it was 2347.87mmcm.

Bulk customers are Shikalbaha power station (SPS), Usmania Glass Sheet Factory Ltd. (UGSFL), 210 MW Thermal Power Station, Eastern Refinery Ltd. (ERL), Tripple Super Phosphate (TSP), Chittagong Urea Fertilizer Ltd. (CUFL), Karnafuli Fertilizer Company Ltd. (KAFCO), DAP and non-bulk customer are Captive power, CNG, Industrial, Commercial & Domestic.

The Guardian: In this context, please mention the names of enterprises where from KGDCL purchase gas for distribution?

Managing Director: KGDCL purchases gas from some national and international operating companies particularly Bangladesh Gas Field Company Limited (BGFCL), Sylhet Gas Field Limited (SGFL), BAPEX, Santos, Tallow and Chevron Gas Fields.

The Guardian:  Would you also mention the number and names of the enterprises as well as individuals to those KGDCL sell its gas?

 

Managing Director: Category wise customer list of KGDCL is mentioned here below.

The Guardian: Please inform us how many kinds and quantity of gas in the figure of Taka KGDCL currently purchases and sells?

Managing Director: The company purchased a sum total of 2172.80 mmcm volume of gas during FY 2011-2012 where the purchase from government-owned Bangladesh Gas Field Company Limited (BGFCL), Sylhet Gas Field Limited (SGFL) and BAPEX were 591.86, 36.25 and 93.11 mmcm respectively totaling to 721.22 mmcm and through Petrobangla from International Oil Company Sangu, Bangura and Jalalabad Gas Field was 1451.58 mmcm. The ratio of gas purchased from state owned gas companies and international oil company (IOC) during the year was 33:67. The value of gas purchased by the KGDCL was about Tk. 809 crore.

The Guardian:  In this context, would you discuss the condensate sales of KGDCL?

Managing Director: During the FY 2011-12 KGDCL sold 1, 01,800 liters of condensate at Tk. 36 lac to Padma Oil Company Limited.

The Guardian: Would you mention us the numbers of current connection, disconnection and application for new connection for KGDCL gas?

Managing Director: As of 30 March 2013 a total number of 3, 69,703 gas connections was given. Number of disconnection and reconnection was 392 and 337 respectively. Number of application of new gas connection is 15,727.

The Guardian: In this context, would you discuss what qualifications of a client or a customer are required to get and remain connected with KGDCL for gas and when a connected client or a customer loses connection or is disconnected?

Managing Director: Primarily to get a new gas connection, applicant must have the owner/tenant of the land and requisite documents along with the application. To remain connected the customer is to abide by the rules and regulation of the KGDCL /government order.

A customer loses connection/disconnected for violation of rules, defaulted gas bills and unauthorized use of gas, etc.

The Guardian: Since the higher court of the country has already ordered to give new connection for gas, what step KGDCL is talking for new application?

Managing Director: Hon’ble Higher Court withdrew the exemption for new gas connection and recently the Energy & Mineral Resources Division has ordered to give domestic connection. Accordingly, KGDCL is undertaking necessary steps for the purpose.

The Guardian: Would you inform us about the geographical area already comes under the coverage of KGDCL?

Managing Director: Chittagong and Greater Chittagong Hill Tracts is the franchise area (geographical area) of KGDCL.

The Guardian:  Would you say what steps are taken by KGDCL authorities to stop wastage of gas, illegal use of gas and to ensure proper metering?

Managing Director: The steps taken by KGDCL to stop wastage and illegal use of gas are presented here below.

1.         Primarily Tele-metering system has been introduced in the CMS of bulk industrial customers for full time monitoring of gas supply at customers’ end. The company also has a plan to introduce Tele-metering system in the CMS of load intensive customers. Electronic Volume Corrector (EVC) type meters are being set up in the CMS of sensitive customers. In the meantime, EVC meter has been set up in 35 CNG customers’ premises and the billing of these customers are being prepared according to EVC data. For this reason accuracy of the gas consumption is being ascertained through EVC for-nightly data.

2.         To improve energy conservation, plans have been undertaken to set up pre-paid meters for domestic consumers. Industrial consumers have been advised to use energy efficient boiler, generator and furnace etc.

3.         In order to transmit, distribute, sell, supply and store natural gas and associated liquid hydrocarbon, to ensure their proper use, to keep an active control on the selling of natural gas and unaccounted for gas, to ensure timely revenue collection of the sold gas, to create a competitive market by the participation of individuals and private sector, the present government has introduced ‘Bangladesh Gas Act-2010’. As a result, mobile court is being regularly directed under ‘Bangladesh Gas Act-2010’. So far twenty-one special expeditions have been conducted by Mobile Court till 30/06/2012. The gas lines of 639 such illegal and unlawful gas users have been disconnected so far and necessary actions have been taken.

The Guardian: Would you give us an idea about wheeling charge, price deficit fund and gas development fund of KGDCL?

Managing Director: The company paid a wheeling charge of Tk. 63.94 crore during the FY 2011-2012 for transmission of gas to KGDCL franchise area through transmission pipelines of GTCL. Last year the amount was Tk 66.59 crore. The amount of wheeling charge is lower as the gas purchase has reduced comparatively.

Price Deficit Fund (PDF) was created to cover the loss incurred by Petrobangla through gas purchase at higher prices from IOC and selling the same to the customers at a lower rate. PDF is collected on the volume of gas supplied from the Government owned gas fields. The Company paid Tk. 60.91 crore to Petrobangla for PDF this year. The amount was Tk 107.03 crore for the previous year. The amount paid for PDF this year is less as the gas supply from the Government owned gas fields reduced comparatively.

Gas development fund was created on 1st August 2009 to increase gas production of the companies appointed gas discovery and production. A payment of Tk. 85.59 crore was made for this purpose during the year. The amount was Tk 47.08 crore for the previous year. In fact, the margin amount of the Gas development fund has remarkably increased due to the rise of selling price of CNG feed gas.

The Guardian: Please discuss what system loss is and how it can be stopped?

Managing Director: System loss is the difference between purchase volume and sales volume. System loss can be reduced by increasing the efficiency of generator, boilers, furnaces etc. of existing customers and frequent vigilance checking of customer’s CMS and RMS and monitoring of monthly gas usage of customers.

The Guardian: So far it is leant that KGDCL has undertaken a number of development activities and projects like civil construction, enlistment of contractors, pipeline construction, Semutang project, operational activities and modernization of testing laboratory, etc. Please tell us something in brief about the progress of all those development activities and projects?

Managing Director: A brief description on development activities and projects is given below.

 

Civil construction

The extension work of the Company’s head office from 5th to 8th floor continues. 60% of the construction work has already been completed. Upon completion of the extension work the floor space of the office building will be increased to 44,000 sq ft. Two lifts, currently operating up to the existing 4th floor, has been installed, and will be later extended up to the 8th floor. There are three buildings of three types, A, B and C, for the accommodation of KGDCL officers in Chandgaon Residential Area. With the authority’s approval the existing C type building is being reconstructed to a single 10-storied ‘C’ type structure. Moreover, the existing E type structure (20 flats) is being renovated and maintained for the officers in Faujdarhat City Gate Station.

Enlistment of contractors

Contractors for 1.1 and 1.2 category during the FY 2011-12 have been enlisted for providing gas connection and constructing gas pipelines in the Company franchise area.

Pipeline Construction

60 and 150 PSIG gas distribution pipeline network exists in the Company’s franchise areas including Chittagong and Chittagong Hill Tract Districts.

During FY 2011-2012, under the development activities of the Company, 13.81 km distribution pipeline having diameter ranging from ¾” to 8″ was constructed (including pipeline shifting into CDA-flyover construction area) against the target of 24.47 km. Despite the huge demand for gas in Chittagong, further growth of pipeline construction was not possible due to the Government restriction and the persistent deficiency of gas supply.

Semutang Project

After the construction of estimated 56 km and 10″ diameter high-pressure pipeline from Semutang gas field to Chittagong ring main under EPCB project (KGDCL part), gas produced from Semutang Gas Field since 2011 is being supplied to Chittagong ring main system by setting up TBS with 30-MMCFD capacity. The implementation of permanent Cathodic Protection system of the recently constructed 56 km and 10″ diameter high-pressure pipelines from Semutang gas field to Chittagong ring main has been completed. The durability of the pipelines will be enhanced as a result of the implementation of permanent Cathodic Protection system.

Operational Activities

A plan to accomplish the maintenance work of 35.48 mile long Chittagong Ring Main Pipeline having various diameters, 10.8 mile long Raozan Power Plant pipeline having 20″ diameter and about 11.40 mile long KPM Spur Line having 8″ diameter have been made. Till now, a 30 mile long high-pressure pipeline has been serviced. Maintenance work including painting of above ground facilities built in different places of Chittagong distribution pipeline has been carried out. Besides, by enhancing the flow capacity of IPDRS at Hathazari, low-pressure related troubles in hathazari Upazila have been solved.

Modernization of testing laboratory

Presently, a turbine meter having diameter of 2″ to 8″ is calibrated by two turbine meter calibration bench/ transfer prover in testing laboratory and diaphragm gas meters ranging from G1.6-G65 by an existing diaphragm meter calibration bench/ bell prover (600 liter). Different types of equipment have been imported to expand and modernize the testing laboratory of the Company under EPCB project (KGDCL part). Among them, one ultra-modern transfer prover (10-4000 cm/h) and a bell prover (1000 liter) will be added in the testing laboratory. After installation of the new transfer prover, turbine meter with diameter of 10″ and flow capacity of 4000 cm/h can be calibrated. At the same time new bell prover can be used to calibrate diaphragm meters up to G100. Besides, equipment has been imported for the maintenance of different facilities of the pipelines installed from Semutang Gas Field to Chittagong Ring Main Line and Nasirabad.

The Guardian: Would you say what measures are available under KGDCL for healthcare of its officers and staff and also for ensuring environmental safety and protection?

Managing Director: The measures available under KGDCL are mentioned here below.

Healthcare

For health care service ambulance and Government approved essential drugs has been made available at the Head Office. First Aid Boxes were provided to all the TBS and DRS for preliminary treatment. Nobody was injured while performing hazardous tasks in this financial year due to effective precautionary measures. Safety measures were taken by providing training to all officers/staff pertaining to the hazardous tasks. During the hazardous tasks, physicians, medical equipment, ambulance and necessary manpower were kept present in the workplace so that instant measures could be taken if any accident occurred.

Safety

Company’s own security guards (along with those recruited by outsourcing) are engaged in different installations of the Company. The activities of those security guards are regularly monitored by the duty officers. CMS and DRS are surrounded by fence/boundary walls to ensure safety. The customers are advised to keep their gas connection risers within a fence. The operators who are posted to the CMS/DRS and other installations are trained in the operation of fire extinguishing to handle fire. These stations are regularly visited by officers. Emergency vehicles along with technicians for 24 hour service are kept standby round the clock for events of emergencies or mishaps. If any event goes beyond the control of the operators, they are advised to inform high officials. During this financial year 21 such complains has been attained. The performance of CMS/DRS is regularly monitored and maintained.

Environment

Before connection of all types of customers except the domestic customers, Environment Cleara-nce Certificate issued from Environment Directorate is taken to ensure that the environment is not harmed. A Section named “Environment and Safety” has been created in the Company to monitor the environment so that it is not harmed by any of its activities. Environment & Safety status of CMS/DRS are being regularly sent to Petrobangla. The Company undertakes training program from time to time on environment and safety issues to train the engineers who in turn, train the personnel working under them.

The Guardian: Would you also discuss what facilities are available under KGDCL for human resources development?

Managing Director: The improvement of Manpower and Human Resources has been running satisfactorily keeping consistency with overall development and financial activities of the Company. In April 2013, the Company had a total of 692 employees of which 305 are officers and 387 are staff.

Local Training

An efficient work force is the precondition for proper management and organizational development. HRD programs are underway to develop the potential of existing manpower and keeping them abreast of the latest development in their respective fields of operation. During the FY 2011-2012 there was a budget provision of Tk. 8.00 lac for local trainings. 98 officers and staffs were provided with training on various subjects at different reputed institutions of the country during the year.

Foreign Training

During the FY 2011-12 there was a budget provision of Tk. 62.00 lac for foreign trainings. Considering the requirement of the Company, 9 officers were sent abroad for overseas training for which Tk. 42 lac has been incurred. Moreover, 44 technical personnel were sent abroad for foreign training with the fund of EPCB project.

The Guardian: So far it is learnt that there remains a provision of welfare program in KGDCL for its officers and staff. Please discuss this?

Managing Director: The welfare programmes are going on satisfactorily keeping consistency with overall development and financial activities of the Company. Under the welfare programs of KGDCL, officers/staffs of the company were provided a loan amount of Tk 5.45 crore to buy lands, motor cycles, and bicycles and for housing, as per company’s policy in the FY 2011-12.

Besides, under the scholarship programs, 43 children of officers/staff were awarded a scholarship of Tk 0.03 crore during the FY 2010-11 and 41 were awarded Tk 0.04 crore in the FY 2011-12 for the purpose of inspiring their children’s education. During this year, annual sports competition and picnic were also arranged with the participation of Company’s officers/staff of all levels under the recreational programs. In addition, every year 9th August is observed as National Energy Safety Day according to the instructions and programs of the Ministry and Petrobangla.

The Guardian: Would you give us a statement of KGDCL’s structure of management, its capital, profit and loss and assets and liabilities?

Managing Director: KGDCL Management Structure is as under.

Company’s authorized capital is Tk.3,00,00,000,00.00. Company’s pre-tax net profit during FY 2011-2012 was Tk.648.95 crore. As on June 30, 2012 the company’s assets were Taka 8,283,840,050 and liabilities were Taka 5,723,777.347.

The Guardian: Would you reflect the various institutional problems and shortage of KGDCL and suggest what steps should be taken to solve those?

Managing Director: Due to a shortage of gas supply for a long time in Chittagong region, the growth of gas connection has almost stopped. As the reduction of Sangu Gas Field and the limitation of gas supply from Bakhrabad-Chittagong transmission pipelines, low-pressure situation prevails in this region.

Currently around 210 mmcfd gas supply is available including the gas supplied from Semutang Gas Field against the daily demand for 400mmcf. Due to this huge shortage, a low-pressure situation persists in Chittagong region. As per situation demands, gas is supplied to the fertilizer factories by cutting down supply to the power stations and vice-versa. Besides, the situation is managed by gas rationing to other customers also.

To fulfill the fertilizer demand throughout the country in boro season, Chittagong Urea Fertilizer Company Limited (CUFL) along with KAFCO is supplied with gas according to Government decisions. To avoid low pressure problems and to keep other customers’ supply normal, we have brought CNG, Captive Power, Steel and re-rolling mills, paper and packaging and the similar customers under gas staggering. These customers are being monitored regularly. Despite staggering, low pressure of gas within KGDCL network is observed from time to time because of gas supply shortage from national grid.

In order to provide uninterrupted gas supply to the existing and promised customers in Chittagong region, the construction of 30″ diameters loop line is essential on an urgent basis from Ashuganj-Bakhrabad-Feni-Chittagong. After the successful implementation of on-going projects undertaken by relevant companies and installation of compressor in Ashuganj, the situation is expected to improve.

The Guardian: Keeping in mind the success and failure of the past, would you disclose the future programmes of KGDCL?

Managing Director: KGDCL Future Programmes are categorically presented here.

–          To settle the issue regarding debts and wealth division between BGDCL and KGDCL through Petrobangla.

–          After using the ring-main line, gas to be produced from Non-sangu area of Santos, PSC and Block-16 is targeted to be sold to BPDB and hence, a draft of gas transportation agreement has been initialized. After determination of gas transmission tariff the agreement will finally be signed.

–          Necessary steps to increase the existing capacity of the DRSs and expansion/improvement of relevant pipeline networks to solve the low-pressure situation will be taken.

–          As the life-span of the CMS’s of large industrial customers, such as- CUFL and KPM is expired, international tender will be invited to procure the new CMSs to keep gas supply uninterrupted.

–          Necessary spare parts for the proper servicing of different customers’ CMSs and DRSs will be procured from abroad.

–          Implement digital mapping of pipeline network through Arc GIS software. After successful completion, it would help monitor gas pipeline network and will stop supply during any accident in any part of the network and to make the planned extension of pipeline network.

–          Steps will be taken to start GPRS /Internet based tele-metering in order to collect Gas consumption instantly and to monitor the supply to various customers & the DRS.

–          Steps will be taken to install server based software network by BUET for marketing department to improve customer services and strengthen the vigilance activities.

–          A project of Pre-paid metering will be processed for the moderate use and saving of gas in domestic sector.

–          A HDD river Crossing Project in Karnaphuli river at Patenga is to be undertaken to enhance the flow capacity and effectiveness of Ring Main Line

–          To procure and set up a 500 KVA gas generator for the Head Office.

–          To accomplish the ongoing extension work of the Head Office building.

–          To prevent the illegal gas use and to keep up the continuing expedition against the defaulters.

–          To keep up the rehabilitation of pipelines and painting and greasing of off-take and Manifold Station(s).

 

The Guardian: In the end, would you please give your valuable message for all connected with the activities of KGDCL and also for the people of Bangladesh?

Managing Director: The achievements so far have been possible because all officers and employees executed their duties with hard work, obedience, sincerity and devotion under the guidance of the Ministry and Petrobangla for which they deserve our appreciation. That’s why I would like to offer my gratitude to all.

I am also delighted and impressed to note that the management has efficiently and effectively administered the affairs of the Company during this year. I, on behalf of the Board of Directors, would like to express my sincere thanks and gratitude to all authorities including the Energy and Mineral Resources Division, Finance Division, Planning Commission, National Board of Revenue, Local Administration and Police Administration and Electronic and Print media.

Further gratitude must be extended to the Petrobangla and the Government and autonomous bodies for extending their wholehearted co operation and assistance to the company.