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New LPG supplier enters the market

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A new company, BM Energy, will begin its journey on Saturday to supply liquefied petroleum gas to households and industries.  The Netherlands-Bangladesh joint venture has already set up a 3,000 tonne-LPG bottling plant in Chittagong’s Barabkunda area with an investment of $26 million, said Managing Director Mostafizur Rahman.
The company will sell three types of gas-filled cylinders — 12kg, 33kg and 45kg — under the brand name of BM LP gas across the country, he said at a press conference yesterday at the capital’s Hotel La Vinci.
BM Energy’s entry comes on the heels of Omera Petroleum’s, which started selling its LPG on April 12. 
Bangladesh has much potential in terms of gas consumption as only 6 percent of the entire population has access to natural gas, and that too mostly in urban areas, said Bert Pronk, chairman of BM Energy. The gap between demand and supply of natural gas is widening by the day owing to the large scale conversion of fuel-run automobile engines to CNG and increased pressures from the growing industries and households, he added.
The country consumes more than one lakh tonnes of LPG a year, 80 percent of which is imported from Saudi Aramco, the state-owned oil company of Saudi Arabia. The rest is produced by state-run Bangladesh Petroleum Corporation (BPC).
The demand for LPG is expected to increase in the coming days as the government looks to stop new piped gas connections for domestic use, said Firoz Ahmed, general manager of sales and marketing of BM Energy. The market structure of LPG has changed dramatically over the years, with growing participation of private companies. For instance, in 2014, the private companies supplied 86 percent of the total demand for LPG in the country, he said.
BM Energy will import LPG mainly from Middle Eastern countries like Saudi Arabia and Qatar, he said, adding that a 5,000 tonne LPG vessel can be anchored at the company’s floating terminal in Chittagong.  
The company has already appointed 3,000 dealers across the country to sell its product, according to Ahmed. The current plant-gate price of each 12kg LPG cylinder is hovering around Tk 1,130 to Tk 1,250.
BM Energy has not disclosed its LPG price; it will announce it when the product is formally launched at the market.  Local Bashundhara and Jamuna Spacetech, France’s TotalGaz and Australia’s Kleenheat are the leading companies that sell cooking gas.
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