Govt dithers on mode of setting up two compression stations

FE Team | Published: March 31, 2011 00:00:00 | Updated: February 01, 2018 00:00:00

M Azizur Rahman
The government is now caught in a dilemma over the mode of installing the much-needed compression stations at Ashuganj and Elenga as it has not yet decided whether it will go for negotiation or competitive bidding to select the contractor, a top government official has said. The energy ministry is mulling both the ways to select the sponsor to set up the gas compression stations, said the official. It is now on a negotiation with Russia's state-owned Gazprom to assign the firm the task to install both the compression stations. The technical evaluation to select a sponsor through competitive bidding is also continuing for building the compression stations, the official said. State-owned Petrobangla has already offered formally the Gazprom to install the compression stations along with drilling works of several gas wells to complete the project works as soon as possible. Gazprom has also responded positively, said the official. State-owned Gas Transmission Company Ltd (GTCL) officials said three foreign firms, Hyundai of South Korea, Fernas of Turkey and Sinopec of China have submitted bids to install the compression stations. Technical evaluation of the bids will be completed soon and thereafter financial offers would be opened, said a senior GTCL official. He said Gazprom delegation also visited both the spots last month after receiving proposals from Petrobangla to install the compression stations. "The modes of installing the compression stations are being weighed up side by side as negotiation with Gazprom and the evaluation of the bidding process are underway," said the GTCL official. Officials said the government's previous lessons in installing the compression stations have pushed it towards chasing both the modes of installation. The government had initiated the move to install three compression stations including that of Muchai more than seven years ago in 2004. It had floated tenders twice in 2006 and 2008 to build three compression stations but both the bidding processes went in vain. After six years' of the initial move, the government is now evaluating the third bidding, floated in May 2010. But this time it has invited bids to install two compression stations as the USA's Chevron has already been awarded the building of a compression station at Muchai following a 'controversial' negotiation with Petrobangla. Chevron got the contract at a negotiated rate of US$ 52 million to install a compression station at Muchai although the proposal of South Korean Hyundai to build the Muchai compression station at $40 million was rejected only due to inadequate fund allocation for the project. A number of issues including inadequate funding along with 'machinations by outsiders' have foiled the previous tendering process resulting in delay of the project and aggravating the country's gas crisis, it was alleged. On earlier occasions, multilateral donor agency Asian Development Bank (ADB) did not allocate sufficient funds to execute the project, which ultimately hindered the moves, it was alleged. The Manila-based ADB earlier allocated only US$ 55 million to set up three compression stations at Ashuganj, Elenga and Muchai. But the bidders had quoted much higher rates resulting in postponement of the previous bids. This time ADB allocated $ 102 million to install two compression stations at Ashuganj and Elenga, said a Petrobangla official. He said installation of these compression stations is necessary to carry natural gas from the country's northeastern gas-rich region to the gas-starved southeastern region with adequate pressure. Despite having enormous gas supplies in the gas-rich Sylhet region, the gas cannot be carried to gas-hungry Chittagong only due to lack of these compression stations, said the official. Once the compression stations installed in the country would have the capacity to carry natural gas to and from any place whenever deemed necessary, he added.