Bangladesh Petroleum Corporation (BPC) has taken an initiative to build the country’s first liquefied petroleum gas (LPG) terminal for supply to consumers at affordable prices.
The refrigerated mother terminal having an operating capacity of about 10-12 lakh metric tons per annum will be built at Dholghat of Maheshkhali in Cox's Bazar district. The area of land allotted for setting up of LPG terminal is about 47.6 acres. The LP gas will be sold in bulk to various LPG operators from this terminal, a BPC official said.
Once completed the refrigerated mother terminal with the transportation cost of LPG per ton will be reduced to $40. In addition to government control over the LPG market, the prices are expected to fall sharply.
According to BPC, the private companies are now importing two to three thousand metric tons of LP gas from Singapore, Malaysia and various countries in the Middle East under their own management for their LPG bottling plant. The transportation cost for small ships is $100 to $110 per tonne. However, the maximum cost of transporting ships with a capacity of 35,000 to 40,000 metric tons will be $ 65-$70 per ton, which means that the cost of transportation per ton will be reduced to $40. The price of the most used 12 kg LPG cylinder in the country can be reduced by about taka 300.
The Energy Division says transportation costs are a big part of LPG. If the transportation cost is reduced, the price of LPG will be reduced a lot.
A BPC official said, some 19 private companies have the facility to import LPG through their own jetties, while 7 companies are selling LPG without import. Five to six more new companies are waiting to come in the market. There are private jetties in Mongla and Sitakunda.
An official said that due to the low depth of the river, private LPG companies import LPG in small vessels. As a result, transportation costs for importing LP gas increase. Importing LPG in large ships will reduce the transportation cost.
Ships with a capacity of 40,000 tons can be anchored at the proposed terminal, where storage capacity will be 50,000 tons. From there, LPG will be supplied to domestic companies with a capacity of 1.5 thousand to 4 thousand ton ships.
BPC, Japanese company Marubini and UK's Vittal Powerco are set to sign a Memorandum of Understanding (MoU) soon for the construction of the terminal.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid said that once the terminal is completed, a part of LPG will always be under the control of the government. The government will buy LPG from the world market at a fixed price. It will then sell to private entrepreneurs by adding transportation costs and terminal charges. As a result, there will be no opportunity to increase the price of LPG. Now the government has no control over the price of LPG. He hopes that once the terminal is completed, the consumer will be relieved.
The Energy and Mineral Resources division official said on March 3, 2021, Prime Minister Sheikh Hasina approved a summary of the proposal for the energy division to sign a Memorandum of Understanding (MoU) for the construction of the terminal.
The MoU was supposed to be between BPC, Japanese company Marubeni Corporation, Vitol Asia Pte. Ltd of Singapore and PowerCo International Pte. Ltd of Bangladesh.
However, Mitsui & Co. Ltd of Japan has requested the State Minister for Power, Energy and Mineral Resources to discuss with the BPC on July, 13 last year. They also requested to consider Beximco LPG Limited of Bangladesh as a local contractor with Mitsui & Co. Ltd and SK Gas International South Korea.
The official said after getting the final approval BPC will sign the MoU soon. It has set a target to complete the project by 2025.
