Feni Gas Field

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Feni Gas Field
CountryBangladesh
RegionFeni
Offshore/onshoreonshore
OperatorNiko
Field history
Discovery1981

Feni Gas Field (Bengali: ফেনী গ্যাসক্ষেত্র) is a natural gas field at Feni, Bangladesh.[1] It is a subsidiary of a Canadian multinational company, Niko Resources.[2]

Location

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Feni gas field is located at Dhliya union of Sadar upazila of Feni district of Chittagong Division.[1]

Discovery

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Petrobangla discovered the gas field in 1981.[3]

2004 Incident

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The Feni Gasfield Incident was a major industrial accident that occurred on 27 June 2004 at the Feni Gas Field, located in Sharshadi, Feni District, Bangladesh. The incident involved a blowout and subsequent fire at a gas well operated under contract by a foreign exploration company. The explosion caused extensive damage to the environment, property, and Bangladesh's natural gas resources.

Background

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The Feni Gas Field, located in eastern Bangladesh, was discovered in 1981 by the Bangladesh Gas Fields Company Limited (BGFCL). After producing approximately 40 billion cubic feet (BCF) of gas, the field was abandoned in 1998 due to declining output. In October 2003, Canadian company Niko Resources entered into a Joint Venture Agreement (JVA) with the Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) to develop the marginal Feni and Chhatak (also known as Tengratila) gas fields. Under this agreement, Niko invested $15 million in the Feni project, aiming to produce between 10 and 15 million cubic feet of gas per day.[4][5]

Gas production from the Feni field commenced in November 2004. However, a formal Gas Purchase and Sale Agreement (GPSA) with Petrobangla, the state-owned oil and gas corporation, was not finalized until 27 December 2006, due to disputes over gas pricing.[6]

Incident

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On 27 June 2004, during drilling operations at the Feni Gas Field, a blowout occurred, leading to a significant fire. The blowout was attributed to operational failures, including inadequate casing design and poor drilling practices. The fire caused extensive damage to the drilling site and surrounding areas, raising concerns about environmental safety and operational standards.[7]

Damage and Impact

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The blowout and subsequent fire resulted in the loss of valuable natural gas resources and inflicted environmental damage on the surrounding area. Nearby structures collapsed due to the explosion, and agricultural lands were affected by the fire and gas emissions. The incident highlighted the risks associated with inadequate safety measures in gas exploration and production activities.

At least 12 people, including two officials of Bakhrabad Gas Distribution Company Limited (BGDCL), sustained burn injuries as the gas line of a CNG filling station in Chhagalnaiya Upazila exploded. The incident took place at Majumder Filling Station in the afternoon when the BGDCL officials were repairing the gas pipeline of the filling station beside Dhaka-Chittagong highway. Of them, 10 were admitted to Dhaka Medical College and Hospital while the rest to Feni Sadar Hospital.[8]

Investigation and Response

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Following the incident, the Government of Bangladesh formed an inquiry committee to investigate the causes of the blowout. The committee's findings pointed to Niko Resources' operational negligence and lack of proper safety protocols as primary factors leading to the disaster. In response, legal actions were initiated against Niko, including claims for compensation amounting to Tk 746 crore (approximately $110 million) for damages caused by the blowout.[9][7]

Additionally, the Bangladesh Environmental Lawyers Association (BELA) filed a petition in the Supreme Court seeking a declaration that the JVA was invalid and an injunction restraining payments to Niko. The court issued an injunction against Petrobangla, preventing payments to Niko until the compensation issue was resolved.[6]

A High Court order also suspended drilling of any development well in the Feni Gas Field. Niko-Bapex was initially producing 20 million cubic feet of gas a day in November 2004. The production has now come down to 1.5 million cubic feet of gas a day. Petrobangla signed the gas sales agreement (GSA) with Niko in December 2006. The price of Feni's gas was fixed at $1.75 per thousand cubic metre following prolonged disagreements between Petrobangla and Niko.[10][11]

Impact after the incident

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The Feni Gas Field Incident had long-term implications for Bangladesh's energy sector. It underscored the need for stringent safety standards and regulatory oversight in gas exploration and production. The incident also led to increased scrutiny of foreign investment in the country's natural resources.[6]

In subsequent years, Niko Resources faced multiple legal challenges, including international arbitration cases. In 2020, the International Centre for Settlement of Investment Disputes (ICSID) held Niko liable for the blowout at the Chhatak gas field and ordered the company to pay compensation to Bangladesh for the loss and damage caused by the blowout, including gas loss and environmental damage.[5]

See also

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References

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  1. ^ a b এক নজরে ফেনী : খনিজ সম্পদ (in Bengali). Cabinet Division, Government of the People's Republic of Bangladesh. 1 Aug 2019. Retrieved 9 Aug 2019.[permanent dead link]
  2. ^ ফেনী গ্যাস ক্ষেত্র নিয়ে নাইকোর মামলায় হেরে গেছে বাংলাদেশ. The Daily Sangram (in Bengali). 8 Jun 2016. Retrieved 6 Aug 2019.
  3. ^ Sirajul Islam, ed. (Jan 2003). "Hydrocarbon Exploration". Banglapedia (in Bengali). Dhaka: Asiatic Society of Bangladesh. ISBN 984-32-0576-6. Retrieved 21 Aug 2019.
  4. ^ "Niko Resources Finds Gas in Bangladesh". www.rigzone.com. Retrieved 6 May 2025.
  5. ^ a b "Canadian firm Niko ruled liable for Chhatak gas field blowout". The Business Standard. 3 May 2020. Retrieved 6 May 2025.
  6. ^ a b c "INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES WASHINGTON, D.C." (PDF). icsidfiles.worldbank.org.
  7. ^ a b "Niko sued for Tk 746cr over Tengratilla loss". thedailystar. Retrieved 6 May 2025.
  8. ^ "Gas line explosion leaves 12 injured in Feni". thedailystar. Retrieved 6 May 2025.
  9. ^ "Niko stops supplying gas from Feni field". today.thefinancialexpress.com.bd. Retrieved 6 May 2025.
  10. ^ "Feni gas field reels from writ petition". thedailystar. Retrieved 6 May 2025.
  11. ^ "Petrobangla files rejoinder against Niko at ICSID". Dhaka Tribune. Retrieved 6 May 2025.