Intraco shows interest in open tender for Bhola gas transport expansion

The company’s MD says gas transport could begin within six months if the government initiates action

The Intraco Refuelling Station, which was responsible for transporting 5 million cubic feet of gas daily from Bhola in CNG (Compressed Natural Gas) form during the previous government’s tenure, has shown interest in expanding its capacity to transport an additional 20 million cubic feet of gas per day.

The company, which signed the earlier agreement under the Quick Enhancement of Electricity and Energy Supply Act, has welcomed the government’s new initiative to select contractors through open tender.

Intraco officials held a press conference at a hotel in Dhaka on Monday to share their experiences in gas transportation.

The interim government repealed the Energy Act, also known as the quick rental law, enacted in 2010 by the Awami League government.

Power, Energy and Mineral Resources Advisor Fouzul Kabir Khan said no contractor will be appointed without an open competitive bidding process.

After discussions with several companies, state-owned Sundarban Gas Company Limited, or SGCL, chose Intraco on May 21, 2023, to transport and distribute natural gas found in island district Bhola to industrial Zones around Dhaka.

Initially starting with a supply of 5 million cubic feet of gas daily, Intraco signed a contract to gradually increase the supply to 25 million cubic feet per day.

However, the company failed to begin transporting the remaining 20 million cubic feet of gas by October as per the agreement, rendering the rest of the contract void.

Intraco Group's Managing Director Mohammed Riyadh Ali said, "The previous government did not opt for an open tender process, so we had to sign the agreement under a special law. However, this did not benefit us.

“Now, with the government’s initiative to move forward with an open tender process for gas transportation, we welcome this step. We also want everything to be done through competition.

“In that case, even if we don't secure the contract and someone else does, we will be able to share our experience and infrastructure with them."

The gas fields in Bhola contain reserves of 2.4 trillion cubic feet of gas. With local demand ranging from 70 to 80 million cubic feet, these fields have a daily production capacity of 200 million cubic feet.

As a result, nearly 120 million cubic feet of gas remain unused.

However, due to the lack of connection with the national transmission line, the surplus gas in Bhola cannot be utilised.

The daily gas demand in the country is nearly 4,000 million cubic feet, while the government can supply a maximum of 3,000 million cubic feet, prompting businesses to call for the transportation of gas from Bhola to meet industrial demand.

Riyadh said, “We are ready to transport an additional 20 million cubic feet of gas daily from Bhola in CNG form. The infrastructure for this is under development.

“If the government takes the initiative, we can start transportation within six months.”

Intraco currently purchases gas at Tk 17 per unit and sells it to industrial plants at Tk 47.60 per unit. Road transportation costs include Tk 12.50 per unit for ferry crossings, Tk 3.85 for tolls, and Tk 10-12 for diesel fuel.

The company has so far supplied gas to 18 factories.

It also expressed hopes that transporting gas via river routes would significantly reduce costs.

Intraco proposed supplying gas to the national grid or large power plants instead of individual consumers, claiming this would lower expenses and benefit all parties involved.