Industries on the capital's northern outskirts suffer as the supplier of Bhola gas to industrial consumers 'arbitrarily' snapped the supply, in time of fuel crunch, sources said.
Officials said Intraco Refuelling Station shut the supply of compressed natural gas (CNG) to industries from Bhola island a couple of weeks back failing to provide bank guarantee worth around Tk 110 million to the government by the deadline.
Before shutting operations, Intraco was supplying around 1.0-1.5 million cubic feet per day (mmcfd) of gas to consumers-only one-fourth of its committed supply of 5.0mmcfd to the factories, particularly in Gazipur and its adjoining areas, where piped-gas pressure remains low, a senior official of state-run Sundarban Gas Company Ltd (SGCL) told the FE Tuesday.
Intraco was supposed to deposit the bank guarantee in favour of SGFL by August 18th, 2024, according to the deal inked between Intraco and SGCL on supply of Bhola gas to fuel-hungry industries on mainland, the official added.
"The company did not invest sufficient money to supply committed volume of stranded gas from Bhola island," he said.
Intraco clinched the deal to supply CNG from Bhola - a bay island district some 282 kilometres off the capital - under the controversial Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 (Amended 2021).
The deal-making took place only through negotiations with government officials concerned through bypassing competitive tender-in line with the contentious law of immunity that turned energy sector into a milch cow for rental and quick-rental companies.
Intraco had close relationship with high-ups of the deposed Sheikh Hasina government, which was the key to getting the project work, market-insiders said.
The refuelling company used this project to gain from stock market after bullying its price, a source on the country's main bourse - Dhaka Stock Exchange - told the FE Tuesday.
"Its share price soared to around Tk 55 each from only around Tk 29.3 between late February and early June 2023 when the news of inking the deal over Bhola gas surfaced," said the DSE official.
According to a news published on the DSE website on March 14, 2023 Intraco Natural Gas Station Ltd, a placement holder of the company (where Mr. Mohammed Riyadh Ali is the Managing Director of Intraco Natural Gas Station Ltd as well as Managing Director of Intraco Refuelling Station Limited), completed its sale of 2,958,902 shares of the company at the then market price.
Sources have 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.
Intraco inked the deal with SGCL, a subsidiary of Petrobangla, in May 2023 to obtain natural gas from SGCL and then compress it for selling to consumers.
Industry owners will have to purchase Intraco gas at the government-fixed rate of Tk 47.60 per Mcf (1,000 cubic feet), which is 58.66 per cent higher than the usual gas tariffs for industrial consumers of Tk 30 per Mcf.
Intraco was making whopping profits of Tk 30.60 per Mcf as it was buying natural gas from SGFL at Tk 17 per Mcf, as per the deal.
But many aspirant companies were interested to buy gas from the government's SGFL at Tk 27, which is 52.82-percent higher than Intraco's purchase costs, says one of such company that had placed offer to the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources (MPEMR).
The aspirants were also intent on selling the output to industries at around Tk 37, which is 22.26-percent lower than the rate that the industry owners buy CNG from Intraco, the businessman said.
He demanded cancellation of the SGFL deal with Intraco and floatation of tender to get competitive prices, which would be beneficial to the government and the industry owners both.
Under the existing deal, Intraco reserves the right to select consumers, says a senior official of state-run Titas Gas Transmission and Distribution Company Ltd.
The firm was supposed to provide Bhola gas in CNG form to industries within the Titas franchise areas, where gas pressure typically remains low for most of the day.
Sources say there are three producing gas fields on Bhola Island with a total production capacity of around 200mmcfd. However, production is limited to around 80mmcfd due to a sluggish demand in the area.
Around 120 mmcfd of surplus gas currently remains unused and trapped in Shahbazpur, Bhola and Ilisha gas fields.
Despite repeated attempt made, neither any Intraco official nor any Petrobangla official was available for comment on the project predicament.
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