The government signed a revised Gas Sales Agreements (GSAs) with LafargeHolcim Bangladesh PLC on Tuesday for the next 10 years.
Under the new deal, LafargeHolcim has agreed to a revised GSA with Jalalabad Gas Transmission and Distribution System Ltd (A Company of Petrobangla) accepting the current industrial gas rate of Tk 40 per cubic meter and Tk 42 for captive use, for a period of 10 years.
The company is operating the only integrated cement plant at Chhatak, Sunamgonj, and has been operating in the country for more than two decades.
Energy Adviser Dr. Faozul Kabir Khan, Swiss Ambassador to Bangladesh is Reto Renggli, Ambassador Mr Gabriel Sistiaga Ochoa de Chinchetru from the Embassy of Spain in Bangladesh and European Union Ambassador to Bangladesh Michael Miller, Mohammad Iqbal Chowdhury, CEO LafargeHolcim Bangladesh PLC and senior officials from the both side were present the signing ceremony at Bidyut Bhaban.
In 2003, the government signed a 20-year agreement with LafargeHolcim setting a ceiling for gas tariffs at $2.8 per mcfd. These caps allowed the companies to benefit from below-market rates for years, despite multiple hikes in domestic gas prices to reduce subsidies, the company has continued paying only Tk 11 (9 US cents) per cubic meter.
Earlier, Jalalabad Gas Transmission and Distribution System Ltd served notice to the company to adjust the gas tariff as per market, the company filed an arbitration case internationally against the Jalalabad Gas Transmission and Distribution System Ltd, arguing that the additional tariffs imposed violated the original agreement.
LafargeHolcim has sought to bypass the BERC-determined tariff pending final resolution and reportedly owes Tk 754 crore in unpaid gas bills, despite continuing gas consumption, according to BERC.
Martin Kriegner, Holcim Group Executive Committee Member and Region Head of Asia, the Middle East and Africa, recently met with Bangladesh’s Chief Adviser, Professor Muhammad Yunus, at the State Guest House Jamuna during the recent Bangladesh Investment Summit.
However, LafargeHolcim proposed a huge investment, contingent on a fixed gas tariff being guaranteed.
“We are thankful to the government for providing continuous support to enable us to produce world-class products in Bangladesh,” stated Kriegner.
He explained that the company utilises “non-recyclable plastics” as a fuel source at its Chhatok factory, asserting that this process has zero environmental impact.
”Holcim has been a global pioneer in sustainable solution technologies, which we are also deploying in Bangladesh,” Kriegner said, adding that the company has carbon capture projects at its plants in other countries, which could be replicated in Bangladesh.
