Supplement, Oil & Energy

Govt to review KAFCO gas tariff

Published : 09 Nov 2019 06:29 PM | Updated : 07 Sep 2020 11:40 AM

Ministry of Power, Energy and Mineral Resources is going to set new gas tariff for Karnaphuli Fertiliser Company Ltd (KAFCO) as re-gasified LNG is added to the national grid.

An Energy Division official said, “The tariff was reviewed last time in September 2015 after 20 years. However, we will do that as we are importing high cost LNG from abroad and supplying it to the national grid after blending it with our local gas.’

The Energy and Mineral Resources Division (EMRD) endorsed the Karnaphuli Gas Distribution Company Ltd (KGDCL) idea to increase the tariff as the government has taken up a plan to meet natural gas demand for country's two major fertiliser factories - the Karnaphuli Fertiliser Company Ltd (KAFCO) and the Chittagong Urea Fertiliser Ltd (CUFL) - through import of Liquefied Natural Gas (LNG), a top official said.

Due to gas shortages, the government at different times has shut down six fertiliser factories including KAFCO and CUFL in a bid to divert gas supply into power plants to ensure uninterrupted electricity supply.

During the irrigation season power plants need extra gas for electricity generation. For this reason fertiliser factories remain closed as gas supply to these plants remain cut off from April-May. 

The country's largest joint venture company has recently urged the Chittagong gas distribution authority, Karnaphuli Gas Distribution Company Ltd (KGDCL), for an uninterrupted supply of 50 mmcfd gas per day and even offered a higher price for the natural gas as compared to that in the industrial sector.

Karnaphuli Fertilizer Company Limited (KAFCO) is a 100 percent export oriented international joint venture company. This factory was established in 1995 beside the river Karnaphuli in Chattogram.

Established in Bangladesh with the shareholding and support of the governments and private sectors of Bangladesh, Japan, Denmark and the Netherlands, KAFCO is the largest joint venture investment in Bangladesh. KAFCO markets its products to many countries around the world.

The KAFCO plant is a fully integrated complex, it lies on 100.03 acres of land, located in Rangadia, Karnaphuli, Chottagram just alongside the Karnaphuli river. 

The KAFCO complex produces high-grade granular Urea and anhydrous Ammonia. The facility consists of an ammonia plant, urea plant, and a urea granulation unit, all supported by captive power generation.