LPG market to heat up | The Daily Star
12:00 AM, April 27, 2016 / LAST MODIFIED: 12:00 AM, April 27, 2016

LPG market to heat up

Five new players coming up with Tk 900cr in investment

Five companies are set to roll out their liquefied petroleum gas business this year in a bid to capture the household segment of the market.

The companies -- Orion, Index, Navana, Sena Kalyan Sangstha and Beximco -- will shell out about Tk 900 crore in total for their LPG plants.

At present, natural gas is piped to households in Dhaka, Chittagong and some other big cities as cooking fuel. But the supply is fast depleting.

The demand for LPG will certainly rise in future and the government has opened the business to the private sector to meet this impending high demand, said Salman F Rahman, vice-chairman of Beximco Group.

LPG is a mixture of propane and butane that becomes liquid under pressure, which can then be stored in pressurised containers for use.

It is relatively new in Bangladesh and the market is still small.

Presently, seven companies supply imported LPG.

The companies are: Totalgaz, Omera, Jamuna, Bashundhara, LAUGFS Gas Bangladesh (formerly known as Petredec Elpiji), BM Energy and state-owned Bangladesh Petroleum Corporation.  Bangladesh consumed only 1.6 lakh tonnes of LPG in 2015, according to industry insiders. Of the quantity, 1.42 lakh tonnes were imported and 18,000 tonnes were generated from different government factories as a by-product.

Industry people said, once the five companies enter the market, the consumers will be benefitted as there will be a dozen LPG bottlers and distributors in total then.

The first to hit the market would be Index LP Gas, a concern of Index Group.

Index LP Gas, which has invested Tk 180 crore to build the country's largest LPG plant with a storage capacity of 6,000 tonnes, will start its journey next month, according to Shafiullah Al Munir, chief executive of Index Group.

Orion has targeted to hit the market by August this year, said its managing director, Salman Karim. The company invested Tk 165 crore in the LPG plant. Sena Kalyan Sangstha, the self-financing welfare trust of Bangladesh Armed Forces, is spending nearly Tk 150 crore on its plant. All the plants are being built in Mongla of Bagerhat.

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