Bangladesh signs first investment agreement with post-sanction Iran for LPG cylinder factory

Bangladesh has signed an agreement with oil and gas-rich Iran on the production of LPG bullet trucks, LPG industrial storage tanks, household cylinders for cooking stoves and cylinders for vehicles in Dhaka.

This is the first agreement related to joint investment between the two countries since international sanctions earlier imposed on Iran were lifted following last July's landmark deal on curbing Tehran’s nuclear programme.

Following the deal with the West, Iranian Foreign Minister Mohammad Javad Zarif visited Dhaka and evinced interest in enhancing relations with Bangladesh.

During his visit, Zarif also suggested cooperation in energy, textiles, manufacturing, industry, science and in areas where both countries had “complementarities”.

After Sunday’s signing in Dhaka, Iranian Ambassador Abbas Vaezi said this would open “a new era of cooperation” between the two nations.

Servigas Company of Iran and a consortium of 16 Bangladeshi private companies under the Bangladesh Star Infrastructure Development Consortium Ltd signed the agreement.

Abdul Matlub Ahmad, President of FBCCI, signed the agreement on behalf of the consortium with the Managing Director of the Servigas, Shah Sh Rabiee.

Prime Minister’s Adviser on Power and Energy Tawfiq-e-Elahi Chowdhury, who witnessed the signing, said it would be the “biggest ever joint investment” agreement between Dhaka and Tehran.

He said depleting natural gas reserves and increasing demand from the factories had forced the government to look for alternative sources for energy, such as LPG.

The FBCCI president said $12 million would be the total cost for setting up the factory.

He said the site for the factory was yet to be finalised, but he hoped that the cylinders from it would hit the market within a year.

“If the two sides agree, then the factory can be set up at any place in Narayanganj, Kishoreganj or Mongla,” he said, responding to a question.

These cylinders would be better in quality than the imported ones and would be cheaper.