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New LPG plant contract with Indian firm after three failed efforts

Since three Liquefied petroleum gas (LPG) projects taken by the government could not see the light of the day, the government recently opted for signing a memorandum of understanding (MoU) with an Indian company to establish a LPG plant in Chittagong.

The MoU was signed on April 18 this year between Bangladesh Petroleum Corporation (BPC) and Indian Oil Corporation Limited (IOCL) for setting up the country`s largest ever LPG plant.

Because of those failed projects, the people in the country are yet to reap the benefit of LPG even though the market price of it had been dropped to half of what it was a year ago.

State owned BPC in July 2011 initiated a Tk 210.46 crore project to set up an LPG bottling plant at Mongla, Bagerhat. That plant would have included import facilities, storage tanks and pipelines.

Incidentally, the original deadline of June 2013 could not be met and later the deadline was extended to June 2016. Despite the extended deadline, the project could not be implemented since the contract with its Indian consultant (Tata Group) had to be terminated after they failed to provide any sort of support.

In the meantime in 2011, another project to set up an LPG bottling plant with a 100,000 tonne capacity at Kumira or any suitable place in Chittagong was taken at the cost of Tk 250 crore.

That project which was taken under public-private partnership (PPP) project failed to meet its 2013 deadline and was again extended up to June 2016. As of today, it failed to see the light of the day.

Lastly, another project worth of Tk 25.60 crore was taken at Elenga in Tangail to construct a LPG cylinder manufacturing plant with an annual capacity of producing 2,40,000 cylinders. The aim of that project was to reduce the dependency on cylinder import. Ironically, no progress has been made in that project till today.

There is a state owned company name LP Gas Limited to take LPG at reasonable price to people’s doorstep. BPC has 100% ownership of LP Gas limited.

This company has been bottling LPG produced in state owned Rupantarita Prakritik Gas Company Limited (RPGCL) and Eastern Refinery Limited, a subsidiary of BPC, through its two bottling plants in Chittagong and Koilashtila.

But the amount that it produces is very low in comparison with the demand. The company only supply 20,000 tonne of LPG in the market through bottling.

Despite the fact that the LP Gas Limited was formed in March 3, 1983 it has failed to mark any significant effects in the last couple of decades

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