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12 June, 2019 00:00 00 AM

Titas systems loss leaps after LNG import

Monthly loss hits 11.58pc, causing Tk 570cr revenue draining
Titas systems loss leaps
after LNG import

The systems loss of Titas Gas Transmission and Distribution Company Limited (TGTDCL) has increased dramatically coinciding with  the injection of the costly imported liquefied natural gas (LNG) into the national grid line, according to a provisional estimate obtained by The Independent.

The provisional data prepared by the company itself show the systems loss of the Titas Gas was 11.58 per cent a month in March this year with LNG supply hovering around 500 mmcf (million cubic feet) per day. In December last year, monthly systems loss was 7.14 per cent when the LNG supply was around 300 mmcf.

Before the injection of LNG into the national grid in August 2018, Titas Gas sustained a systems loss of 1.3 per cent in June 2018. In 2017-18 FY, the average systems loss of Titas was 1.41 per cent, according to official data.  

As per Titas data, the country’s largest distribution company purchased 159.18 crore standard cubic metre (SCM) of gas in March 2019 and sold 140.05 crore SCM, indicating a missing quantity of 14.81 crore SCM after taking into account a 2.2 per cent deduction as permissible systems loss.  The 14.81 crore SCM of gas is worth around Tk 570 crore. A Petrobangla and Energy Division official on condition of anonymity said the calculation of gas price is based on imported LNG price, which is Tk 39 per SCM.  

According to a 2018 BERC (Bangladesh Energy Regulatory Commission) order, 2 percent distribution loss is allowable for gas purchase through own transmission line while 2.25 percent is allowable transmission and distribution loss for gas purchase through GTCL line.

When contacted, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said the government is looking into the issue and it is trying to plug the loopholes.    

“ACC recently submitted a report identifying areas of malpractice in Titas. We will work on the ACC recommendations to cut the systems loss”, Hamid added.

Meanwhile, the state minister for Power, Energy and Mineral Resources announced in a ministry briefing on Sunday that all existing gas meters will be converted into pre-paid ones.

"We are taking a project to remove old gas pipelines from all areas along with Dhaka city and set up new lines and install prepaid meters," he said, adding that the government is taking measures

to convert all gas meters into pre-paid in all residential areas in order to discourage the wastage of gas. “200,000 prepaid meters already got connection and we have applied to the Japan International Cooperation Agency for further cooperation,” he added.

When informed about this sudden increase in systems loss, Dr M Tamim, an energy expert, said any systems loss of over 2 percent from Titas is not acceptable. “A systems loss of around 12 percent indicates that Titas is plagued by malpractice and corruption,” he added.

Energy Division secretary and Titas Board Chairman Abu Hena Md Rahmatul Muneem said he did not know that the systems loss is nearly 12 per cent. “If I don’t know the real figure, how can I make a comment to the media?” he said.

Petrobangla imported Tk 9,129 crore worth of LNG till 20 May this year.

Ruhul Amin, chairman of Petrobangla, declined to make any comment. “Titas is a fully autonomous company. So, they will be able to tell you why there is a huge amount of monetary loss every month,” he said.

Kamruzzaman, director (operation) of Titas Gas, told The Independent Titas used to collect gas bills without providing proper gas pressure, suggesting that factories were being forced to pay a minimum amount of 60 per cent, irrespective of whether the customer got gas or not. “But now, they are getting high pressure, but paying the same bill amount, causing a systems loss. But I acknowledge there are some illegal connections,” he said.

Sharifur Rahman, director (finance) of Titas, said: “Titas’s revenue remains unchanged, even though LNG is being injected into the system.”

Bangladesh entered into the LNG era in August last year after the LNG brought from Qatar was supplied into the national grid line. This was done after regasification was carried out in the country’s first floating storage and regasification unit (FSRU) docked at Moheshkhali. The government is buying LNG at Tk 39 per SCM and is selling the same for Tk 7.17. Altogether, two FSRUs—one of Excelerate Energy and another of Summit—are currently supplying a total of 500 mmcfd of regasified LNG to the network.

The Titas officials said there were over 10 lakh illegal gas connections, revenues from which do not show in Titas’s ledger. So, in times of increased supply, those illegal connections offset the actual earnings from the legal gas lines.

To continue the LNG import, the government has already given Tk 2,500 crore to Petrobangla in subsidy. Moreover, more than Tk 5,000 crore was spent from government’s Energy Security Fund to import LNG.

Sources said Petrobangla paid Tk 9,129 core for LNG import and regasification till May 20 this year.

Earlier last month, the ACC submitted a report to the state minister of power, energy and mineral resources, Nasrul Hamid, in which the anti-graft watchdog detailed the types of corruption in Titas in 22 categories.

The report said Titas incurred systems loss due to illegal connections. A Titas employee usually gets, on average, Tk 45,000 in bribe for providing an illegal connection. Titas staff also intentionally refrain from installing electronic volume collectors (EVC) in the gas supply system through which gas pressure and temperature could be measured accurately.

The ACC report, after analysing the Titas audit report of FY2015-16, found that gas worth of Tk 292.95 crore was shown as ‘systems loss’ in case of residential connections. On the basis of an overall review, the team submitted a 12-point recommendation for the prevention of corruption in the company.

The recommendations include speedy supply of pre-paid meters to all types of Titas Gas subscribers, the arrangement of sudden and unannounced inter-departmental inspection and following-up on severing of illegal gas connection.

The ACC also recommended enhancing the Titas manpower, taking harsh departmental action against corrupt officials and resolution of the discrepancies found in the audit report in a swift manner.


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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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