Friday, October 15, 2004

Bangladesh: "Gas supply for 25 years assured " - Ratan Tata

["We are satisfied as the energy minister today assured us about smooth availability of natural gas to run the plants over the next 20 to 25 years," Ratan Tata said. Mosharraf said on Thursday "every detail including the quantity and price of gas for the Tata plants would be finalised within four to five months through a feasibility study." In the first phase, Tata Group would require 200 million cubic feet of gas per day, Mosharraf said. The country has 15.33 trillion cubic feet of proven and recoverable gas reserves, according to energy ministry estimates.]

Tata sees Bangladesh ventures running by 2008


DHAKA (Reuters) - The Chairman of Group said on Thursday he hoped industrial ventures in a proposed $2 billion investment plan for Bangladesh would go into operation by end-2008, if not before then.

"If everything goes smoothly I believe it will take three to four years for us to go into production in Bangladesh," Ratan N. Tata told reporters after a meeting with State Minister for Energy A.K.M. Mosharraf Hossain.

The Tata Group on Wednesday signed a deal with Bangladesh's state-run Board of Investment (BOI) for the industrial plan -- the biggest single investment in the impoverished country.

Tata Group plans to build a power plant, steel mill and fertilizer factory in Bangladesh, which Finance Minister M. Saifur Rahman said would encourage other foreign investors to come to the country.

"We are satisfied as the energy minister today assured us about smooth availability of natural gas to run the plants over the next 20 to 25 years," Ratan Tata said.

Mosharraf said on Thursday "every detail including the quantity and price of gas for the Tata plants would be finalised within four to five months through a feasibility study."

In the first phase, Tata Group would require 200 million cubic feet of gas per day, Mosharraf said. The country has 15.33 trillion cubic feet of proven and recoverable gas reserves, according to energy ministry estimates.

The Tata group will also examine whether power can be produced by using coal as fuel, the minister said.

Bangladesh has proven reserves of 64 million tonnes of high quality coal at Barapukuria, 450 km north of Dhaka, he noted.

Bangladesh officials earlier said Dhaka had agreed to guarantee a 20-year supply of natural gas for the Tata projects: a 1,000 megawatt power plant with $700 million investment, a 1 million-tonne per-year fertiliser plant with $600 million investment and a 2.4 million-tonne steel mill with $700 million investment.

The Tata investment is five times the total foreign direct investment (FDI) in Bangladesh last year. Total Bangladesh FDI since 1972 has amounted to $3 billion.

Professor Abu Ahmed of the economics department of Dhaka University said he welcomed the Tata investment as it would add value to the country's natural gas and create jobs, but he told Reuters he would continue to oppose any plan to export gas via pipeline.

The prospect of gas exports -- most likely to India -- has been a sensitive political issue in Bangladesh. Major opposition parties have said they will resist any move to sell gas without ensuring reserves to meet domestic needs for 50 years.

Donors believe Bangladesh should export gas to generate funds for development while the international oil companies said they could not produce gas as per installed capacities because of poor local demand.

Mosharraf said the Tata projects, when all commissioned, would provide at least 10,000 jobs. "Moreover, the international oil companies and donors including the World Bank, Asian Development Bank and IMF would stop pressing us to export gas."

Reuters 14/10/2004