 | Canada's Niko resumes gas production in Bangladesh
10 March, 2006
DHAKA (Reuters) - Canadian oil firm Niko Resources Ltd said it had resumed gas production at its southeastern Feni field in Bangladesh after a commitment from the government on payment of outstanding dues.
"We have resumed natural gas supply from the field on Wednesday at 4:15 p.m. to the national grid," Niko's Bangladesh country manager Brian Adolph told Reuters.
To start with, Niko is supplying only 2 million cubic feet of gas per day (mmcfd), but within a couple of days that will be raised to between 30 and 35 mmcfd, he said. Niko's daily production capacity from the field is up to 40 mmcfd.
Niko suspended output on February 27 because of a delay in payment of dues as well as a dispute over pricing of the gas.
Niko officials decided to resume production at Feni following a meeting with the government's energy adviser Mahmudur Rahman on Wednesday.
State oil and gas company Petrobangla has so far paid only $4 million against $22 million in dues, Niko officials said.
Besides, Niko has demanded a price of $2.35 per thousand cubic feet of gas (mcf), while Petrobangla offered $1.75 per mcf.
"But Niko agreed to accept their offer as an interim arrangement and had suggested to appoint an arbitrator to settle the issue."
Bangladesh's total gas supply capacity is now 1,570 million cubic feet a day (mmcfd), leaving a daily shortfall of 80 mmcfd, energy officials said.
Bangladesh, which produces gas from 13 out of 23 discovered fields, has 14 trillion cubic feet of proven and recoverable gas reserves based on current estimates.
Release link:http://www.metronews.ca/reuters_business.asp?id=135753
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