Professional Documents
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Fuel industry
Submitted By:
Submitted to:
The information used throughout the project were all collected from a secondary
source, mainly from the internet. It could have been better if we could have
conducted some primary surveys for collecting the information. The internet had
very few information through some news portal and through some government
website which was also very much insufficient to come into a very realistic and
fruitful conclusion of this assignment.
We would also like to thank All Mighty “Allah” for enabling us to complete this
case analysis. Last of all we would like to recognize the contribution of each team
members who worked equally to create this assignment as much relevant as
possible by the guidelines provided to us. If our faculty, after going through this
text has any valuable suggestions for us we would be very glad to incorporate it.
2
August 25, 2010
Dear Sir,
We are please to submit the assignment “Exploring the Distribution Channel:
Fuel industry” which was due for the course MKT 625, Distribution Management.
The case analysis is very much relevant to what we are learning in this course. Since this
is a new course for us, the case has helped us a lot in understanding the practical aspects
of distribution channels in Petroleum Industry of Bangladesh.
Despite the time constraints and other problems, we have tried our best to make the case
as logical as we could. Therefore, we would be obliged if you could please accept this
report. If any further assistance are needed please contact us at mmanzur@dhaka.net
Sincerely yours,
3
Table of Contents
4
Of Fuel and Distribution: Bangladesh Overview
How Fuel Distribution Effects Bangladesh Economy
Although agflation started picking up in 2003, it has gathered pace in the past
few months (Chart 1). Food prices rose by 11.7 per cent during the 12 months to
October 2007, to be over 50 per cent higher than their 2002 levels.
There are many reasons for high and rising agflation. While the impact of
Cyclone Sidr is not visible in the chart, it does show the impacts of the floods in
the summer of 2007. As it was, prior to the flooding, there were already
disruptions to the supply chain caused by various demolition drives and anti-
corruption operations earlier in the year. The anti-corruption drive was, at least in
part, a response to alleged market collusion that may have fuelled agflation
before 2007. In addition to these shocks and microeconomic reasons, the
depreciation of the taka against the Indian rupee also fuelled agflation in
Bangladesh since late 2003.1
However, even if these domestic reasons were absent, it is likely that we would
have to contend with high and rising agflation. This is because agflation is a
5
global problem, as shown in Chart 2, which compares agflation in Bangladesh
with international averages.
And the global agflation is set to continue into 2008, as a recent Financial Times
article reports:
Global food prices will come under further pressure today as benchmark prices for
cereals at much higher levels kick in, making it almost inevitable that a second wave of
food price inflation will hit the world's leading economies. In Chicago wheat and rice
prices for delivery in March 2008 have jumped to an all-time record, soyabean prices are
at a 34-year high and corn prices at an 11-year peak. Knock-on price rises are set to hit
consumers in coming months, raising inflationary pressure and constraining the ability of
central banks to mitigate the slowdown in their economies. A first wave of surging cereal
prices hit the wholesale market during the summer and has fed through the supply chain
and contributed to rising inflation.
There are two major reasons behind this. The first -- rising income in the
emerging world -- is a welcome development that the world will need to cope
with. Rising income in the emerging world means that millions of people in these
countries can now afford to have meat and dairy items on a regular basis. This
has increased the price of farm and poultry produces. But animals are fed grain,
so prices of cereal crops also rise.
6
The emergence of China, India and other such economies is not a sudden
development. And it's not only food prices that have increased recently as a
result of increased demand from the emerging economies. Prices of oil and
various metals have also been at historic highs in recent years.
That said, changes in diet and food consumptions that have come with rising
prosperity have been gradual, whereas the rising global agflation is a much more
sudden phenomenon. The more recent global agflation is a direct result of strong
demand for subsidized corn-based ethanol as a fuel for cars.
With oil prices rising to around one hundred dollars a barrel, it is not surprising
that consumers are looking for alternative fuels. The alternative liquid fuel that is
the current favorite of American policymakers is ethanol, whose production is
currently subsidized by legislation. In the United States, the grain of choice for
ethanol production is corn, unlike the sugarcane used by Brazil for its ethanol.
The US corn market, like for the rest of US agriculture, is already distorted by
subsidies and interventions that are playing havoc in the world cereal markets.
The artificial expansion of ethanol production has created an increase in the
demand for its main input corn, driving up its price. American farmers have
reacted by diverting productions away from other crop, raising their prices as
well. According to the Economist:
7
This year the overall decline in stockpiles of all cereals will be about 53m tonnes -- a
very rough indication of by how much demand is outstripping supply. The increase in the
amount of American maize going just to ethanol is about 30m tonnes. In other words, the
demands of America's ethanol programme alone account for over half the world's unmet
need for cereals. Without that programme, food prices would not be rising anything like
as quickly as they have been.
The US ethanol program has its origin in the idea of "energy security" -- an end
to American reliance on imported fossil fuel. But the way biofuel subsidies
interact with other policies can actually produce more demand for fossil fuel. For
example, production of "flexible-fuel vehicles" (that is, vehicles that can use both
ethanol as well as fossil fuels) are subsidized. Because the fuel-economy credit
is biggest for the least energy-efficient models, manufacturers concentrate on
sport utility vehicles and light trucks. Yet almost all the drivers of these vehicles
use ordinary petrol. The result is greater consumption of petrol, not less.
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Shafiq Alam/ driknews
And what is the real price of this subsidy? Two statistics are widely quoted.
According to studies by Gary Becker, a Nobel laureate from Chicago, a one-third
rise in food prices reduces living standards in poor countries by a fifth. And
according to the World Bank, the grain needed to fill up an SUV would feed a
person for a year.
What would a more rational biofuels policy look like? The IMF recommends free
trade in biofuels while levying a carbon tax on all fuels to reflect emissions costs,
and promoting research and development of renewable energy. But the realistic
chances of scrapping this farm subsidies program in favor of a more rational
policy are perhaps not high during an election year.
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Raj Aniket/ driknews
It is self-evident that our policymakers will have to manage the adverse impacts
of food prices through macroeconomic and microeconomic policies in the short
term. It is also clear that agricultural productivity needs to rise to increase food
supply in the medium to long term. But agflation is going to continue to pose a
problem for us, and the world, so long as American ethanol subsidies and similar
interventions that distort the market place remain in effect.
10
Firm/company specific Channels participants
Tough and strict competitive rules of world economy determine that today’s
business survival and further prosperity are based on efficient and operating
distribution system. Focus on producing high-quality and inexpensive goods are
not the only case nowadays. The mission lies in motivating prospective
customers to buy petroleum products and to make them stay with the company
while markets are fully overstocked by different alternative stuff.
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In 1976-77 the sale of petroleum products in the country was 11.14 lac MT which
has increased to 37.82 lac MT in 2005-06. From 1975-76 to 1980-81 the demand
increased @ 6.28% average per year. From 1980-81 to 1985-86 the demand
increased @ 2.9% average per year. The demand dropped by 4.06% in 1990-91
from 1985-86, which is a fall of 0.81% per year. From 1990-91 to 1995-96 the
demand increased @ 11.21% average and @ 7.40% per year from 1995-96 to
2007-08.
12
Diesel Less Than 119 Gallons Non-Bulk Diesel fuel is exempt from the
hazardous materials regulations if packaged in non-bulk (less than 119 gallons
each) containers. When carried in non-bulk containers, there is no limit on total
gallons carried at any one time. This falls under 49CFR 173.150(f) of the DOT
Hazardous Materials regulations which states that a flammable liquid with a flash
point above 100 degrees Fahrenheit may be re-classed as a combustible liquid.
It is recommended that employees be trained at a minimum in Hazard
Communication and Spill Response.
Vehicles should be equipped with a petroleum spill kit when transporting large
quantities of diesel fuel.
Greater Than 119 Gallons Bulk Diesel fuel carried in bulk (greater than 119
gallons) containers must comply with the following:
Diesel Fuel
NA 1993
5. Diesel fuel weighs approximately 7.5 pounds per gallon. At quantities weighing
1,000 pounds or more, the vehicle must be placarded with the appropriate
placard.
13
The transportation of the diesel from the
beginning to the end is illustrated in the
side diagram.
The diesel is either imported of being
obtained from other sources.
As the diagram shows that the petroleum
is loaded in depot (Padma, Meghna,
jamuna) and then subsequently
transferred to the other regional depot
and then they are carried out by long oil
vehicles to different filling stations
around the country.
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Set up lubricating plants including plants for recycling or revamping of
used lubricants;
Process and set up facilities for processing of refinery waste or residual
products;
Plan and install petroleum (crude and refined) storage facilities;
Determine allocation of petroleum products against the marketing
companies;
Procure inland oil tankers;
Establish and expand petroleum marketing facilities;
Export petroleum and petroleum products;
Act as managing agents of or to enter into any management or any other
agreement or contract with, any farm or company;
Supervise co-ordinate and control the affairs of the enterprises;
Discharge any other function assigned or delegated to it by the
Government from time to time, and
Do such other acts and things as may be necessary for carrying out the
purposes of this ordinance.
15
BPC has 7 (Seven) subsidiary companies of which there are 3 (three) Oil
Marketing Companies, 1 (one) Refinery, 1 (one) LP Gas Plant and 2 (two) Lube
Blending Plants. Company-wise share of BPC are as under:
Diesel is mainly used in large automobiles and generation of power using it in the
diesel generators.
At first the Company storages it’s all products in main installation at Patenga,
Chittagong. From the main installation, products are supplied to various locations
throughout the country. The storage network of the company is shown below:
16
From those storages, products are distributed to enlisted dealers/agents/retailer
and Government consumers & Industrial sectors.
Division-wise sales of POL Products for the last five years are as follows:
17
Sector-wise sales of POL Products for the last five are as follows:
18
So basically the most petroleum is consumed by the transport industry and next
by agriculture. So the channel members must ensure that these two segments
get access to them very smoothly. In Bangladesh the transport system is still not
that good. We do face legitimate logistic problem and in many parts of the
country the access is still not that smooth. The Diesel is a component of the fossil
fuel that with the evolution of technology and mankind this has turned out to be
the most crucial for survival. In Dhaka metropolitan city no new connection for
domestic electricity is provided any more. But the life is not at a stop. People now
consume Diesel to generate power. For example, the state of the art
Grameenphone corporate building doesn’t have any access to electricity from the
national grid. As a result it needs to produce its own power. So as a result it
consumes more than BDT 500,000 worth of Diesel per day. So Diesel is
extremely essential in our day to day life. The channel partners need to ensure
that it is being delivered at the right time, in the right place to the right people.
The remote access to many places is a hurdle that this industry is facing for a
prolong period of time. With the improvement of physical infrastructure, this
matured industry will foster its operation more and the consumer ease of
consuming the product will increase.
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Conflicting areas between channel partners
Since BPC is the single sole distributor in Bangladesh for distributing Diesel & in
fact all petroleum products. In the product flow, the product remains most of the
time of its life with the BPC’s own subsidiary locations. So here is less channel
conflicts can be mentioned. But if we consider subsidiaries as a separate identity
then there is a chance to work on channel conflict.
Another issue is the dealers or agents in the remote or rural areas. There is bad
practice of taking extra hidden charge from users in some places. Here control is
not that much closely monitored. But these are very sensitive locations for the
survival of our farming industry. This is happening only because of distribution
inefficiency and lack of monitoring efforts.
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Analysis of the power structure of channel
system.
A distribution channel is defined as a set of independent organizations
performing all of the functions necessary to make a product available for the
consumers or industrial users. Consideration of the behavioral dynamics of
channel members is clearly established in the marketing channels literature and
in particular issues of power sources, dependence, control, power and conflict
plays a vital role in channel the channel system.
There are five power sources including reward power, coercive power, legitimate
power referent power and expert power. Our text focus on following power
sources;
Reward Power: Reward power based on one party’s (the source firm) ability to
gives/offers the rewards for other party (the target firm)
Coercive Power: The source firm’s ability to influence unpleasantly for the target
firm, such type of power can be categorized as coercive power
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Referent Power: Referent power is defined as results largely from the
influencee’s feelings of identification with the influencer and desire to maintain
similarity with influencer.
Expert Power: Expertise is a means by which the power holder comes to control
specialized information.
There are eight companies operating under BPC: the only oil refinery of the
country, Eastern Refinery Limited (ERL); the three oil distribution and
marketing companies, namely Padma Oil Company Limited, Jamuna Oil
Company Limited and Meghna Oil Company Limited; two lubricant blending
plants, namely Eastern Lubricants Blenders Limited and Standard Asiatic Oil
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Company Limited; one LPG bottling and distribution plant, LP Gas Limited and a
bitumen production company, Asphaltic Bitumen Plant.
But the companies, through filling station dealer, packed point dealer, agent and
LPG dealer provides service (distribution) indirectly. These dealers for their
respective areas consumers, markets petroleum products in the government set
price.
To ensure petroleum products to the filling station dealer, packed point dealer
agents and LPEG delaer and to supervise their operation each company e.g.
Padma, Jamuna and Meghna Oil Company limited has 4 regional offices and in
greater divisional areas has office and have 50 distribution centers in total.
Against the demand of the consumers in advance payment of the price through
invoice they distribute oil from and through the oil dipos.
BPC with the help of its subsidiary companies has developed storage facilities at
different points of the country for fuel oils to ensure timely supply and market
regulation. BPC subsidiaries also use their marketing agents for product
marketing at the local market. The major oil depots are located at Godnail,
(Narayanganj), Daulatpur (Khulna), Fatullah (Narayanganj) and Baghabari
(pabna). Medium-size depots are at Rangpur, Parbatipur (Dinajpur), Bhairab
Bazar, Ashuganj, Srimangal, Dhaka, Chandpur, Barishal and jhalokati. Small
depots are at Chilahati (kurigram), Balasi (Gaibandha), Harian (Rajshahi),
Natore, Sylhet, Brahmanbaria. BPC has developed a storage capacity of 206,000
tons at its central establishments and approximately 688,000 tons at the other
depots of the country.
BPC also currently installing a $132 million pipeline, to be installed by end 2012,
will connect an off-shore mooring point with BPC's depot near the country's main
Chittagong port. It will help reduce unloading time for a tanker to only two days
while it now takes some 11 days. Currently BPC uses smaller vessels to unload
the cargo from oil tankers.
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Beside these functions as the only channel participant BPC engages in the
following distribution activities
24
The government has formed five-member committees comprising a Union
Parishad member, one representative each of society, non-government
organizations, Agriculture Extension Department and the law enforcement
agency to prepare a list of small and marginal farmers for distribution of cash as
diesel subsidy among the farmers for Boro farming season in each village across
the country. The government has decided to provide Tk 750 crore in subsidy for
diesel procurement by the farmers for irrigation in January. The government will
distribute the subsidy for procurement of diesel among the marginal and small
farmers who own land below 2.50 acres.
Diesel from Assam would be delivered by waterway at Baghabari oil depot in the
country's main boro cropping area, The government approved a proposal for
importing 60,000 tonnes of refined oil from Egypt to meet increased demand
during the irrigation season. More than 1.2 million diesel-operated pumps, 80
percent of all mechanised pumps, consumed nearly 1.7 million litres of diesel
each month for irrigation during the boro season.
Therefore we can see that the power structure that might be practiced in the
distribution of fuels e.g. diesel is coercive power which the government of
Bangladesh can imply over its wide range of suppliers e.g. through filling station
dealer, packed point dealer, agent and LPG dealer by means of its parent three
company e.g. Padma, Jamuna and Meghna Oil Company in the 4 regional
offices with 50 distribution centers altogether. The power that is used over here is
demand based on the necessity of the public who mostly purchases diesel as a
bare necessity product.
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Existing strategic alliance in the channel system
and possibilities of forming a strategic alliance
A strategic alliance is a close, open-ended relationship linking distinct
organizations. Such alliances are usually designed to fill a specific purpose, such
as developing a new product, exploring a new technology, manufacturing more
effectively, or exploiting a market opportunity. Sometimes strategic alliances are
embodied; they are embodied in contracts or business understandings,
embellished, adapted, and cemented as working relationships grow.
A committed manufacturer is one that feels the same way about the distributor. A
committed distributor exhibits several visible symptoms of its allegiance to the
manufacturer. In particular, distributors place their confidence in manufacturers
whom they see investing in them.
Distributors who see these investments being made greatly increase their
confidence in the manufacturer and their willingness to enter a strategic alliance
with their supplier.
26
Strong alliances bring substantial benefits but at substantial costs. One of these
costs is the flexibility to change your mind and exit the relationship painlessly.
Manufacturers that have carefully selected their distributors will find themselves
far more able to manage the vulnerability that a strategic alliance demands. As
distributor's confidence in its supplier's commitment increases the more the
supplier limits its representation in the distributor's market. Distributing intensively
(blanketing a market with outlets), while it does increase product availability,
reduces the distributor's confidence in the manufacturer, thereby lessening the
distributor's willingness to commit to a strategic alliance.
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Many companies are attracted by the lure of strategic alliances, and the logic of
such relationships is especially compelling when the proposed partner is one's
own reseller, the link between a company and its market. But such alliances do
not come free, or even cheap. Corporate pronouncements will not do. To
convince a distributor to become a genuine marketing partner, a manufacturer
must put its resources--and its own commitment--behind its pronouncements.
Distributors will demand our commitment--your reciprocity--before they will
extend theirs.
Ultimately, strategic alliances are based on mutual need. Mutual need, in turn,
creates tension and conflict. But if managed well, such relationships are the basis
for a formidable marketing advantage.
The Group has strengthened its market leadership at home while reaching out to
international markets. Ranging from automotive aftermarket products, energy
and power solutions, to a retail chain.
28
are fast gaining equity as International brands. The Group’s portfolio includes
international tyre brands Dunlop and Kenda, and its own brand RZ Tyre.
Rahimafrooz is the exclusive franchisee of the full range of lubricant brand
Castrol in Bangladesh.
Through Rahimafrooz IPS, UPS and Voltage Stabiliser, the Company enjoys
clear leadership of the emergency power products market. The Company brings
to Bangladesh leading gas and diesel generator brands – Pramac as well as
Mitsubishi. It also markets home and industrial lighting products from General
Electric USA (GE) and electrical accessories from Hager France.
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One of the SBUs of Rahiamfrooz Group, Rahimafrooz Renewable Energy Ltd.
distributes solar home systems to underdeveloped rural regions of Bangladesh.
For that, the company received the Ashden Award for Sustainable Energy in
2006.
BPC can form strategic alliance with Rahimafrooz group for distributing its
petroleum products like Diesel through the already existing networks of
suppliers of its energy products e.g. Rahiamfrooz’s energy division which
provides Solar solutions for the rural, off-grid areas of Bangladesh where the
national grid cannot reach. They can also in collaboration with Rahim afrooz
distribute diesel to the farmers to run their irrigation pump during the peak Boro
season.
BPC can also take the advantage of the exiting Rahimafroozs non-profit
organization Rural Services Foundation (RSF) through which the solar home
systems reach the customers in the rural areas of Bangladesh to run the Diesel
generators that are required for government emergency power sources in
remotest corner of the county and get county wide coverage .
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Major strengths the closest competitors have in
comparison to Diesel
Bangladesh, being one of the least developed countries of the world, has
electricity coverage for only 35% of the land. Moreover, at present Bangladesh
can only supply 70% of the total power demand. 86% of the total numbers of
power plants are operated by natural gas, 6% by coal, 4% by hydro power and
4% by oil, which imparts highest risk of severe environmental pollution.
Implementation of Solar Photovoltaic Technology in power generation can
significantly decrease environment pollution in terms of Green House Gas (GHG)
emissions.
RRE has launched a solar powered pumping system for water and irrigation
purpose. For an agro-based country like Bangladesh where electricity for
pumping is very scarce, this is the solution which will enable us to save a lot of
energy. The solar pump comprises of the pump, a motor, solar modules, a
control device and piping accessories. RRE is also working on Solar water
Purification for arsenic / saline / other water compositions.
Rahim Afroz Reneable Energy ltd (RRE) has introduced solar-powered irrigation
system in 2004 through converting a 10 HP diesel run irrigation pump to solar
power. Since then hundreds of beneficiaries are enjoying solar based water
pumping service for irrigation and drinking water.
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During the Boro season, 120 million acre rice field in Bangladesh is irrigated by
1.33 million of different types of water pumps, among which 87% are diesel
operated, requiring 800 million liter diesel per year. The government provides
taka 5,400 cash subsidy on diesel operated water pumps. Seasonal crisis and
price volatility of diesel are common hazards that are associated with diesel
pump based irrigation system in
32
The highly low cost battery-run three-wheeler dubbed as Borak Super gets even
more energy efficient as local entrepreneurs introduced solar panels to partly
power up its rechargeable battery. A solar panel is installed on the roof of the
vehicle to provide about 20 percent recharge for its batteries.
Borak Super ran for a short period of time in the capital. The vehicle is
considered as the most energy efficient and environment friendly that has ever
hit the Dhaka streets. The zero emission three-wheeler consumes electricity
worth around Tk 30 a day. During the day the solar panel keeps on charging the
batteries that will ultimately save 20 percent electricity. With an eight-hour
recharge from a regular power outlet the vehicle can run 120 km at its highest
speed of 40 km per hour. To minimise energy consumption the body was made
with light material.
Eight companies are assembling the three-wheelers locally with parts imported
from China. A large chunk of this electric-solar vehicle is being assembled at
Bangladesh Diesel Plant Ltd (BDPL) in Gazipur. Priced at around Tk 1.2 lakh
each, a total of 100 vehicles have so far been sold in 12 districts. The fare is
almost the same as rickshaws. Daily earning of a driver is about Tk 1500. Borak
has an automatic gearbox and the batteries last for about 18 months if
maintained properly.
It has a huge potential if it gets a little boost from the government. It is eco-
friendly; it saves electricity and is cheap to run. Considering the status of energy
and pollution, it is one of the most viable options.
LCG CNG
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floating LNG terminals are creating revolution in LNG trade. It can be used in
natural gas vehicles, although it is more common to design vehicles to use
compressed natural gas.
In the early 2000s, as more players take part in investment, both in downstream
and upstream, and new technologies are adopted, the prices for construction of
LNG plants, receiving terminals and vessels have fallen, making LNG a more
competitive means of energy distribution. Much of this growth is driven by need
for clean fuel and some substitution effect due to the high price of oil (primarily in
the heating and electricity generation sectors).
Natural gas can be considered as the most environmentally friendly of the fossil
fuels, because it has the lowest CO2 emissions per unit of energy and because it
is suitable for use in high efficiency combined cycle power stations. Because of
the energy required to liquefy and to transport it, the environmental performance
of LNG is inferior to that of natural gas, although in most cases LNG is still
superior to alternatives such as fuel oil/ diesel or coal. This is particularly so in
the case where the source gas would otherwise be flared.
34
Possible threats of alternative or breakthrough
distribution channel due to the technological
advancement.
Rahim Afrooz has already introduced the concept of solar pump in the rural
areas of Bangladesh where it is being used for irrigation purpose. The distribution
system has already been developed to reach the customers in the rural areas
who are in need of such technology as a substitute of fuel. The government has
been emphasizing the development of more advanced technology to expand the
supply and distribution of products that use solar panel.
Solar panel is also a good solution for the crisis of load shedding in Bangladesh.
However, it is a very costly alternative if compared to the usage of diesel for
running generators in the urban and semi urban areas in Bangladesh. Due to
proper research and development of appropriate technologies to market the
products, solar panel still remains a costly alternative for people looking for a
solution for the load shedding in Bangladesh.
On the other hand, Rahim Afrooz is one of the pioneers in providing solar pump
technologies to its valued customers the rural areas for the irrigation purpose.
Due to the severe crisis in the power sector, the rural people are facing great
difficulties in ensuring an efficient irrigation system that requires fuel as resources
to run pump. Now after the availability of solar pump, the rural farmers can easily
irrigate their land without facing difficulties of meeting power crisis.
35
Liquefied natural gas or LNG is another possible breakthrough distribution
channel.
Import of LNG by private sector and utilizing it in energy starved regions is one of
the alternatives to confront immediate requirement of some gas starved region
like Chittagong. Bangladesh is in serious energy crisis. Massive load shedding,
crises of fuel and water supply is practically paralyzing the civic life and posing a
threat to industrial and commercial collapse. The monofuel based power
generation requires some years of extensive exploration and exploitation of
available natural resources to even reduce the deficit and requires huge
investment at every level of energy value chain.
LNG accounted for 7% of the world’s natural gas demand. The global trade in
LNG, which has increased at a rate of 7.4 percent per year over the decade from
1995 to 2005, is expected to continue to grow substantially during next years.
The projected growth in LNG in the base case is expected to increase at 6.7
percent per year from 2005 to 2020. The world-wide interest in using natural gas-
fired combined cycle generating units for electric power generation, coupled with
the inability of North American and North Sea natural gas supplies to meet the
growing demand, substantially broadened the regional markets for LNG. It also
brought new Atlantic Basin and Middle East suppliers into the trade.
LNG is principally used for transporting natural gas to markets, where it is re-
gasified and distributed as pipeline natural gas. LNG offers an energy density
comparable to petrol and diesel fuels and produces less pollution, but its
relatively high cost of production and the need to store it in expensive cryogenic
tanks have prevented its widespread use in commercial applications.
36
(LNG carriers) or cryogenic road tankers. The energy density of LNG is 60% of
that of diesel fuel.
The most important infrastructure needed for LNG production and transportation
is an LNG plant consisting of one or more LNG Trains, each of which is an
independent unit for gas liquefaction. LNG is loaded onto ships and delivered to
a re-gasification terminal, where the LNG is reheated and turned into gas. Re-
gasification terminals are usually connected to a storage and pipeline distribution
network to distribute natural gas to local distribution companies or Independent
Power Plants.
37
Recommendations
Strategic Alliances:
To bring overall operational efficiency, BPC can go for strategic alliances
which will increase productivity and also reduce the overall cost. Cost
Strategy should be the focus here to bring out the organization from
financial burden.
38
eventually help the other industries heavily. Especially our farming sector
will be highly benefitted.
END
39
References
www.bpc.gov.bd/
www.bapex.com.bd/
investing.businessweek.com/research/stocks/private/snapshot.asp
en.wikipedia.org/wiki/Bangladesh_Petroleum_Corporation
www.thefinancialexpress-bd.com/more.php?news_id=81860
www.rahimafrooz.com/.../RahimafroozRenewableEnergyLtd/.../Default.asp
x
www.thedailystar.net/newDesign/news-details.php?nid=133023 –
www.thefinancialexpress-bd.com/2009/06/05/68788.html
en.wikipedia.org/wiki/Channel_conflict
en.wikipedia.org/wiki/Strategic_alliance
www.thecbbc.org/Available%20Joint%20Venture%20Partners.pdf
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