Chevrons Plans to Set up LPG Plant at Bibiyana

International oil kingpin Chevron is interested to set up an LPG bottling plant in Bibiyana Gas Field area of Bangladesh. The Director (External Affairs) of Chevron Bangladesh, Mr Naser Ahmed, said that they have already sent a draft proposal to the Energy Division of the government. The proposal is currently awaiting approval.

Mr Muhammad Imaduddin, Director (PSC) of Petrobangla expressed his enthusiasm about the initiative of Chevron. He said that they are currently discussing whether the project would be categorized under Product Sharing Contract or should it fall entirely under private sector.

As a growing country the demand of LPG is massive in Bangladesh. Report show that 20,000 tonnes of cooking gas is produced domestically per year and another 80,000 tonnes are imported by private sector. Industry investors say that the annual demand in Bangladesh is approximately 500,000 per year.

The demand for LPG in Bangladesh is increasing very fast due to a recent government ordinance that prohibits natural gas connection to residents and all other small businesses. Even though there is a tax exemption on LPG import, the cost of LPG is quite high in Bangladesh. That makes it hard for average households to buy and use LPG every month.

Chevron already has two PSC projects in Bangladesh; one is covering Block 12 of Bibiyana field and the other one is covering Block 13 and 14 in Jalalabad and Moulavibazar fields. Currently it sells the extracted gas to the government. The Bibiyana Expansion project got approved in July 2012. This project includes expansion of the gas plant, development wells and a more efficient liquid recovery unit.

Chevron expects the production of the proposed bottling plant to commence in 2014.