Bangladesh initiates feasibility study for new urea plant

Bangladesh is embarking on a feasibility study to establish a urea plant that may benefit from the country’s gas reserves and available energy resources. This initiative, led by the government in Dhaka, aims to address the increasing demand for fertilizer and bolster the country’s food security. The study is spurred by the significant gas reserves discovered in the south-central region of the country.

Prime Minister Ms Sheikh Hasina, nearing the end of her current tenure early next year, has emphasized the need for this study. The focus is on evaluating the viability of a fertilizer plant based on gas from the Bhola field, located approximately 182 kilometers from Dhaka.

The Bangladesh Chemical Industries Corporation (BCIC) is tasked with conducting the feasibility study. It will also explore options for both local and international funding to bring this project to life. A critical aspect of the study will include assessing transportation logistics for moving gas from Bhola to Dhaka, where many industries currently grapple with energy shortages.

Nasrul Hamid, the State Minister for Power, Energy, and Mineral Resources, recently announced the discovery of a new gas field in Bhola by the Bangladesh Petroleum Exploration and Production Company (BAPEX). This field, known as Ilisha-1, is the 29th largest in the country, with an estimated reserve of 200 billion cubic feet (BCF) of gas. Hamid highlighted that the gas fields in the Bhola area, including Ilisha-1, collectively hold reserves of about three trillion cubic feet (TCF).

Presently, Bangladesh’s fertilizer production is hindered by insufficient gas supply, compelling the government to import fertilizers at high costs. The country produces around 2,300 million cubic feet per day (mmcfd) of gas from 22 fields, supplemented by 700 mmcfd of imported gas. This falls short of the demand of approximately 4,000 mmcfd, resulting in a deficit of about 1,000 mmcfd. Data from Bangladesh’s central bank reveals that the nation imported fertilizers valued at $4.91bn in the financial year 2023, a significant increase from $$4.39bn imported in 2022, marking a year-on-year growth of about 12%.