With fast-growing demand for bottled cooking gas, Bangladesh Petroleum Corporation (BPC) is proposing to build a very large liquefied petroleum gas (LPG) bottling terminal to meet the demand.
A BPC source said that four foreign companies have separately offered joint venture with BPC. "We have received proposals from several overseas companies. We will find one to form a joint venture company for setting up the project," said Md Sarwar Alam, BPC's Director (Marketing).
The state-run BPC proposes to build the facility in Moheshkhali of Cox's Bazar in collaboration with a foreign company and claims it could offer much cheaper bottled gas than the present.
The Energy and Mineral Resources Division has formed a committee to evaluate the proposals.
The companies offering joint venture are Malaysian Petco Trading Labuan Company Limited (PTLCL); Japanese Mitsui & Co Ltd, South Korean SK Gas International and Bangladeshi East Coast Group; Japanese Marubeni Corporation, Singapore's Vitol Asia Pte. Ltd and Power Co International Pte. Ltd; and South Korean Hyundai Engineering Co. Ltd and EI Corporation.
The PTLCL proposed to build a 12 lakh metric tonne LPG handling terminal with an investment of $100-150 million. The company is looking for an equal share of the equity.
Mitsui and partners proposed to set up a 10 lakh tonne capacity terminal with a cost of $310 million, where the BPC will have a 15 percent share.
Marubeni and partners offered the BPC a 30 percent share and their proposed cost for installing an LPG terminal is $305 million.
However, South Korean Hyundai Engineering Co. Ltd and EI Corporation's offer to BPC is not mentioned in their proposal.
A source seeking anonymity at BPC, however, said that they were more comfortable to see a Japanese company implementing the project.
The plant would have a capacity to handle import and bottling of 10 lakh tonnes of LPG annually. The country currently consumes more than six lakh tonnes—most of which is supplied by private companies and a fraction by the BPC. Last year, 5.37 lakh MT of LPG was imported and marketed by private sector entrepreneurs out of the total of 5.54 lakh MT consumption.
Just five years ago, the country could supply around 1.3 lakh tonnes of LPG. But with a persisting shortage of piped natural gas for cooking, the demand for LPGs soared and private investment poured in.
However, private company produced gas cylinders cost much higher than the government produced ones. BPC sells a 12.5 kilo gas cylinder for Tk 700. Private companies sell the same for Tk 1100.
BPC believes that it would be able to offer bottled gas at a much lower rate than the present.
The government decided to stop piped gas connections nearly a decade back with dwindling gas production from the country's gas fields. It has decided that new gas connections would be given only to sectors with high productivity—like industries or power plants.
In this context, the BPC sees a bigger LPG market in the country soon.
The public sector only produces 15,936 tonnes of LPG for bottling. Of this 10,000 tonnes are obtained as a byproduct from processing of crude oil in Eastern Refinery at Chattogram and the rest is extracted from natural gas in Kailastila gas field at Sylhet.