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BD to export LPG as value added product

Published : 11 Oct 2019 09:44 PM | Updated : 06 Sep 2020 05:48 PM

Two private Bangladeshi companies, Beximco Petroleum Ltd and Omera Petroleum Ltd are to export liquefied petroleum gas (LPG) to India as value added product this month. A trial supply of the LPG was carried out in August 2019, sources said. The supply from Bangladesh will cut the distance of the LPG source for the Indian state from 1700 kilometres to 200 kilometres.

An Energy Division official said "It is a private sector initiative. However, it will increase the job opportunity for some people here and the NBR could enhance its income. According to the official, the two companies will export LPG to state-owned Indian Oil Corporation (IOC), which will bottle and sell to its consumers in north-eastern Indian state of Tripura.

On October 5, Prime Minister Sheikh Hasina and her Indian counterpart Narendra Modi jointly inaugurated the sourcing of bulk LPG from Bangladesh to Tripura in New Delhi, during her latest official visit to that country. The consignment will be shipped to Bishalgarh, a town in Sepahijala district of Tripura in India, through Bibirbazar border point in Cumilla.

Northeast India comprises eight states-Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura. Currently their combined LPG demand is around 20,000 tonnes per month. Of this, Bangladesh's two private companies will export 4,000-5,000 tonnes per month initially, which may increase in future, according to industry players in Bangladesh.

According to sources at Mongla port, if any overseas vessel anchors at the port, it is required to pay Tk 7 lakh. Thus, from the export of 4,000 tonnes of LPG to India under the Business to Government model, the port will earn about Tk2 crore each year. However if the quantity is increased, the revenue will also go up.

A Beximco official told Bangladesh Post, We will export LPG to India as early as October. Initially our target is to export 2,000-3,000 tonnes per month. The LPG price will be fixed according to international market. Azam J. Chowdhury, Director of Omera told Bangladesh Post, “We are ready for export. India will give us import plan and LC then it will start. Initially 4-5 cargoes will go for shipment per month. Gradually it may increases.”

Earlier, an expression of interest was sought from prospective LPG suppliers in Bangladesh in August 2017 for the supply of the gas in bulk from Bangladesh to Tripura. In response, three parties namely Omera Petroleum Ltd, Beximco Petroleum Ltd and Premier LP Gas Ltd expressed interest for the job on the basis of the qualities delivered.

Out of the three, the first two parties got the approval to export LPG to India, an official said. There are 19 importers and bottlers of LPG in Bangladesh and their combined production capacity is nearly 20 lakh tonnes against a demand for only nine lakh tonnes. The public sector supplies only 15,936 tonnes of LPG for bottling. Of this, 10,000 tonnes is obtained as a by-product from the processing of crude oil at Eastern Refinery in Chattogram and the rest is extracted from natural gas in Kailashtila gas field at Sylhet.

At present, India imports almost a million tonnes of LPG every month to meet growing local demand. The demand is expected to rise to 35 million tonnes by 2031-32, according to some estimates. Kuwait, Qatar and Oman are the other traditional LPG suppliers to the country under term contracts.