Daewoo awarded contract for supplying pipes to two projects
Tuesday, 28 April 2009
M Azizur Rahman
The government has awarded South Korean Daewoo company the contract for supplying pipes to two major projects for installation of gas transmission pipelines at a cost of around US$ 75 million.
The state-owned Gas Transmission Company Ltd (GTCL) has already issued notifications of awards (NoA) to Daewoo for supplying American Petroleum Institute (API) standard line pipes for the two projects in the country's northern region.
The South Korean company won both the tenders for supplying API standard pipes for construction of Manohordi-Jamuna 30 inch 51-kilometer pipeline and Jamuna-Bheramara 30 inch 85-kilometer pipeline as the lowest bidder. However, the bid prices were much higher than the actual project allocations, a senior GTCL official told the FE Monday.
The quoted prices were higher as the GTCL floated international tenders to purchase API standard line pipe for both these projects in mid- 2008 when the prices of line pipe and other associated equipment were very high.
But the GTCL was confident that it would not have to pay higher prices than the rate in the international market for the API standard line pipe from Daewoo.
"In the bids accepted by the GTCL, there is a provision for making adjustment to fluctuations in prices in the international market," GTCL Managing Director Mohammad Aminur Rahman told the FE.
He hoped that the criteria would be properly executed during payments.
The Daewoo won the work order for supplying API standard line pipe for setting up the Manohardi-Jamuna gas transmission pipeline quoting around $28 million.
The same company won work order for supplying similar quality line pipe for installation of the Jamuna - Bheramara gas transmission pipeline quoting price at $46.22 million.
The Manila-based Asian Development Bank (ADB) will provide more than half of the project cost, while the remaining expense will be borne by the government, said a senior energy ministry official.
A Petrobangla official said the gas transmission pipelines, if installed, will have to remain idle until gas compressors are installed at different strategic points in the national gas grid and gas production is increased.
The tenders for installation of compressors are now at the evaluation stage, the official said.
It will take at least a couple of years from now to install the compressors, if the projects are approved, he said.
Otherwise, the operations of these pipelines will be delayed further
Besides, he said, the country does not have sufficient gas to run through the pipelines as it is already struggling to provide required gas to the existing connections having a deficit of 250 million cubic feet per day (mmcfd).
Production in scores of industries has remained halted and electricity generation in power plants suspended due to the country's gas supply crunch.
To come out of this situation the government is now closing down fertiliser factories to provide gas to the existing power plants and industries
The country's aggregated gas production is now hovering around 1900 mmcfd against the demand for over 2050mmcfd.
The demand is on increase at least by 10 per cent a year.
The government has awarded South Korean Daewoo company the contract for supplying pipes to two major projects for installation of gas transmission pipelines at a cost of around US$ 75 million.
The state-owned Gas Transmission Company Ltd (GTCL) has already issued notifications of awards (NoA) to Daewoo for supplying American Petroleum Institute (API) standard line pipes for the two projects in the country's northern region.
The South Korean company won both the tenders for supplying API standard pipes for construction of Manohordi-Jamuna 30 inch 51-kilometer pipeline and Jamuna-Bheramara 30 inch 85-kilometer pipeline as the lowest bidder. However, the bid prices were much higher than the actual project allocations, a senior GTCL official told the FE Monday.
The quoted prices were higher as the GTCL floated international tenders to purchase API standard line pipe for both these projects in mid- 2008 when the prices of line pipe and other associated equipment were very high.
But the GTCL was confident that it would not have to pay higher prices than the rate in the international market for the API standard line pipe from Daewoo.
"In the bids accepted by the GTCL, there is a provision for making adjustment to fluctuations in prices in the international market," GTCL Managing Director Mohammad Aminur Rahman told the FE.
He hoped that the criteria would be properly executed during payments.
The Daewoo won the work order for supplying API standard line pipe for setting up the Manohardi-Jamuna gas transmission pipeline quoting around $28 million.
The same company won work order for supplying similar quality line pipe for installation of the Jamuna - Bheramara gas transmission pipeline quoting price at $46.22 million.
The Manila-based Asian Development Bank (ADB) will provide more than half of the project cost, while the remaining expense will be borne by the government, said a senior energy ministry official.
A Petrobangla official said the gas transmission pipelines, if installed, will have to remain idle until gas compressors are installed at different strategic points in the national gas grid and gas production is increased.
The tenders for installation of compressors are now at the evaluation stage, the official said.
It will take at least a couple of years from now to install the compressors, if the projects are approved, he said.
Otherwise, the operations of these pipelines will be delayed further
Besides, he said, the country does not have sufficient gas to run through the pipelines as it is already struggling to provide required gas to the existing connections having a deficit of 250 million cubic feet per day (mmcfd).
Production in scores of industries has remained halted and electricity generation in power plants suspended due to the country's gas supply crunch.
To come out of this situation the government is now closing down fertiliser factories to provide gas to the existing power plants and industries
The country's aggregated gas production is now hovering around 1900 mmcfd against the demand for over 2050mmcfd.
The demand is on increase at least by 10 per cent a year.