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Sunday, March 05, 2006

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HEADLINE
 
Resuming gas supply to nat'l grid
Govt warnings fail to push Niko into submission
S M Jahangir
3/5/2006
 

          The Niko Resources (Bangladesh) has still remained rigid in its stand on discontinuation of gas supply to the national grid from its Feni field despite warning of legal actions by the government.
The Canadian oil and gas company - Niko - has made it clear that it will not resume the gas supply unless it receives clear assurances from the government on the fixation of gas price and payment of arrear bills.
"They (Niko) will not resume gas supply without getting sufficient assurance from the government on settlement of pending issues pertaining to the gas supply and purchase agreement (GSPA) and payment of outstanding bills," a senior government official said, quoting Niko.
The official further said the Niko has, however, expressed its willingness to discuss the issues with the government.
The company has already sough an appointment with the Energy Adviser Mahmudur, the official confirmed.
"A meeting between the government and the Niko is expected to take place after the arrival of the energy adviser, who is now outside the country on an official visit," he said.
The official, however, indicated that the current row over the suspension of gas was likely to be over following the upcoming crucial meeting.
The Niko stopped supplying gas from its Feni filed from February 27 last on ground of non-fix ation of gas price and payment of arrear bills by the government.
A day after the suspension, the government warned the Niko with tough legal measures unless it immediately resumed gas production and supply from its Feni field to the national grid.
In a formal letter to the Niko, the state-owned Petrobangla also expressed its resentment over the sudden and 'unilateral' decision on suspension of gas supply by the company.
The Petrobangla said that the Niko should have discussed the matter with the joint management committee (JMC) before going for the shutdown.
The Petrobangla, however, requested it to immediately restore gas production to an increased quantity from the field.
It also informed the company's country manager that the government was actively scrutinising the draft GPSA submitted by the Niko, saying that it would be settled in due course of time.
According to official sources, although the Niko started production and supply of gas since November 2004, the government has so far failed to sign a GPSA with it.
As a result, the fixation of gas price remained unsettled over the period, they noted.
Initially, the Niko asked US$ 2.35 for per unit (1,000 cubic feet) of gas from the government.
But the government formed a committee to fix the gas price from the Niko's Feni field, officials said, adding it recommended the rate of $ 1.75 per unit.
Latter, the Niko revised its previous rate to $ 2.10 per unit, according to sources.
They, however, said as per the recommended rate by the committee, the government required to pay $ 14 million against its purchase of gas from Niko while the amount could be $ 18 million as per the company's asking rate.
The government, on the other hand, paid only $ 4.0 million to the Niko, a government official informed the FE.
Although the Niko was able to supply gas between 28 and 29 million cubic feet per day (MCFD) to the national grid, the volume declined to only 2.0 MCFD in recent days due to some technical problems.

 

 
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