Energy Bangla

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Dhaka Monday,  Feb 6, 2023

Gas price has been raised up

KAFCO Agreement was Changed After 20 Year

Mohiuddin Miah

After 20 years KFCO agreement has been changed. Gas price raised a bit

and conditions is relaxed. KAFCO starts to get gas after 6 month.
New Gas supply agreement has been renewed between Karnaphuli Gas
Distribution Company and Karnaphuli Fertilizer Company limited
Source informs, ‘last 8th September they have the agreement.’
Previous agreement was expired on 31 July 2015. This agreement was
signed before 20 years.
Source of Energy department informs, ‘KAFCO gas supply agreement has
been renewed with increased gas price. Now, per thousand cubic feet
gas is sold by $4.55cents; before it was $3.03cents.’
Before, the agreement was for 20 years; now it is for 5. Government
has the authority to review the price after 2 years. If needed, they
can increase the price. According to new agreement, Government doesn’t
need supply gas to KAFCO as priority basis and government can cancel
the agreement if they want.
Secretary of Energy department Abu Bakar Siddik said, ‘the agreement was
signed with increased price for countries interest. Now country will
get profit by selling gas to KAFCO. Beside this, KAFCO has better
machines than other aged fertilizer factory and they are experienced
too. So, KAFCO can produce more fertilizer by using less gas.’
Siddik added, ‘this agreement is better than the previous one.
Bangladesh will get improved price of gas; on the other hand We will
get more dividend because Bangladesh of more shear then the others.
Bangladesh, Japan, Denmark, Netherland, investment fund of developing
countries (IFU) and sub-continental ammonia Investment Company are the
joint owner of KAFCO. At present, Bangladesh industrial ministry has its 43%
ownership; japan has 30%, Denmark 20% and others have the rest. This
factory was established in 1995 beside the river karnaphuli. Earlier,
Gas Supply Agreement (GSA) was renewed in 2004-05 fiscal year.

Bangladesh buy KAFCO’s fertilize in international price. It
manufactured Urea and Ammonia. Every year KAFCO produce almost 7 lack
MT Urea fertilizer and 1.5 lack MT ammonia Gas.
In irrigation season power plants needs extra gas for power
generation. For this, gas supply has been cut off from April-May. At
that time fertilizer factory have to shut down. KAFCO didn’t have gas
supply because of agreement expires.
According to information, after renewal of agreement; KAFCO gets gas from 9 September and after that the supply was gradually increased. First day KAFCO gets 1cr 50lack
cubic feet gas; Sunday it was 4cr 55lack cubic feet. In total,
everyday KAFCO gets almost 6cr cubic feet gas in an average.

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