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The Energy and Mineral Resources Division (EMRD) along with top officials of Petrobangla and Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) decided Sunday to fix the gas purchase price from Niko's Feni gas field at US$1.75 per unit (1,000 cubic feet).
The meeting, chaired by EMRD Adviser Mahmudur Rahman, also decided to ask both the Niko Resources and the BAPEX to open a joint account to facilitate all types of monetary transactions under the guidelines of joint venture agreement (JVA) signed by these two companies.
It has also decided to ask the Niko about how the latter would like to plan for compensating the damage caused by two consecutive gas-field blowouts -- one in January 2005 and another in June 2005 -- at Tengratila.
The company was earlier held responsible by the government for the blowouts and it agreed to compensate for the same.
"The decisions of Sunday's meeting would be communicated to Niko within a couple of days," EMRD adviser told the newsmen after the meeting.
He said the gas price fixed at Sunday's meeting would not be changed.
Rahman was also critical of the previous mode of monetary transactions between Niko and the government, when latter paid $4.0 million as gas price.
"It was illegal and contrary to the terms and conditions of the JVA as under its provision any kind of monetary transactions should have been done through the joint account," he said.
Niko took the money through a single account of the company, EMRD sources said.
Sunday's meeting was targeted to resolve the crisis between the government and the Niko, which surfaced on February 27 last when the latter stopped supplying gas to the national grid, citing the reasons of non-fixation of gas price and non-payment of arrear bills by the government.
The Niko did not take the consent from its joint venture partner -- BAPEX -- before stopping gas supply. It, however, was forced to resume supply of gas to the national grid on March 8 following a government's 24-hour ultimatum on March 7 and an earlier warning on February 28.
The government had also threatened to transfer the operational responsibility of Feni gas field to the BAPEX from the Niko if the latter failed to comply with the government ultimatum.
After the cessation of gas supply from the Feni field, the Prime Minister's Office (PMO) approved a long-pending Niko proposal to drill the third well at Tengratila.
EMRD sources said Niko is now trying to fix the gas price at US1.75 for per unit for an interim period.
EMRD adviser categorically refused to accommodate the Niko's stand, saying: "We cannot fix gas price for an interim period."
The Niko started supplying gas to the national grid from Feni gas field since November 2004 without signing the GPSA as both the parties failed to reach an agreement on the gas price.
As a result, the issue relating to fixation of gas price has remained unresolved over the period, they noted.
Initially, the Niko asked $2.35 per unit of gas from the government.
But an official committee agreed to pay $1.75 per unit on the ground that the Niko was given a developed-but- abandoned field at Feni.
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