The government is reviving a joint venture LPG project between Bangladesh Petroleum Corporation (BPC) and oil giant Esso, one that was considered "dead" because of some serious flaws in the proposal, sources said.

An inter-ministerial meeting will review the project today.

The project was proposed in January 1997 but was shelved in early 1998. It had proposed setting up of a one lakh tonne capacity LPG bottling plant with an import terminal and marketing of LPG in Bangladesh through the BPC.

Esso, which is globally merging with oil giant Mobil, was earlier proposed to be black listed by the BPC for violating rules In a tender floated to import 5.2 lakh tonnes of petroleum products for July-December this year.

BPC’s subsidiary Jamuna Oil. which is involved in marketing petroleum products, is already a partner of Mobil In another LPG Joint venture project.

Sources said that the LPG Joint venture project originally involved an investment of 22 million US dollars.

It was proposed that BPC. though a regulatory authority, would purchase a minimum of 20.000 tonnes of LPG from Esso annually and market those.

The government had then opined that BPC did not have any marketing network and that a Joint venture partner could not be forced to purchase a certain quantity of LPG. The government had suggested that a distribution agreement could be signed with BPC’s sister concern. LPGL.

It was proposed that BPC

would own 25 per cent share in the project, Mohammadi Petrotrade (a local private company) 15 per cent and Esso 60 percent.

The government had said that the agreement would be signed between Esso and BPC on the basis of a 75 per cent - 25 per cent equity. If any third party has to be Included, it should be ■ done from Esso's share later on.

Following the government stand. Esso did not proceed further with the project. However. the project may be revived with one modification that BPC will not have to buy 20.000 tonnes of LPG as a mandatory provision.

The sources said it has now been proposed that a BPC land in Mongla will be used for the project.

"This plot of land has been . earmarked for setting up the second unit of the Mongla Oil

Installation (MOI). It does not have any room for a LPG plant," noted a source.

Earlier last month, Esso was proposed to be blacklisted or fined one million dollars by BPC. Sources said that Esso was the lowest bidder in a tender to import 5.2 lakh tonnes of petroleum products.

But when the BPC Board was finalising the bid procedure on May 31. Esso sent a revised price raising it by Tk 23.64 crore.

Taken aback by such an unprecedented move from a oil giant. the BPC Board awarded the contract to the second lowest bidder. Shell Oil.

As per rule. BPC then suggested fining Esso one million dollars or blacklisting it for two years. The suggestion has been forwarded to the Energy Ministry.