TDS Desk:

The government has cut natural gas allocation for Intraco Refueling Station to one-fifth as the company failed to supply the committed volume of compressed natural gas (CNG) from Bhola.

As a result, the company will be able to compress up to 5.0 million cubic feet per day (mmcfd) of gas under its existing deal with the state-run Sundarban Gas Company Ltd (SGCL).

Intraco inked the 10-year deal with SGCL in May 2023 to supply gas from Bhola to the gas-starved industries in Dhaka and its adjacent areas.

Under the deal, it was supposed to compress up to 25 mmcfd of gas by October 2025 and supply it to consumers through cascade cylinders by trucks.

This was the first such agreement in the country to compress natural gas and supply it to users with the private sector’s help.

Intraco was supposed to supply around 5.0 mmcfd of gas to the gas-starved factories in Gazipur and its adjacent areas where piped gas pressure remains low.

It started supplying gas in late December 2023. After supplying around 1.0-1.5 mmcfd of gas, it suspended operations during August-October 2024.

The company resumed operations on October 21, but the CNG it supplied was far below the commitment made in the deal, said sources.

They said the company stopped supplying CNG after failing to provide bank guarantee of around Tk 110 million to the government by the August 18, 2024 deadline.

Before resuming operations, it, however, provided the bank guarantee, sources added.

The company allegedly did not invest sufficient money to supply the committed volume of gas.

Intraco clinched the deal to supply gas from Bhola, a bay island district some 282 kilometres off the capital, under the controversial and currently-revoked Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 (Amended in 2021) bypassing tender.

Sources said state-run Petrobangla had picked only Intraco to carry out the job, although around a dozen more companies were willing to execute the project at lower costs.

The industry owners have to purchase Intraco gas at the government-fixed rate of Tk 47.60 per cubic metre, which is 58.66 per cent higher than the usual tariff of Tk 30 per cubic metre for industrial consumers.

Intraco enjoys a margin of around Tk 30.50 per cubic metre as it gets Bhola gas from the government at Tk 17 per cubic metre.

The company, however, bears all the related costs, including conversion into CNG and transportation.

Intraco has the authority to select consumers from the state-run Titas Gas Transmission and Distribution’s franchise areas separately to supply gas and collect bills.

The Shahbazpur, Bhola, and Ilisha gas fields in Bhola have a combined production capacity of around 200mmcfd.

However, production is limited to around 80mmcfd due to sluggish demand in the area, causing around 120mmcfd to remain unused.