The government has signed a contract with a Bangladesh-Indonesia joint venture to ensure the best use of the locally produced natural gas condensate under a project involving Tk 505 crore.

Condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas. It is later refined into petrol and octane.

Different gas fields in Bangladesh produce about 12,570 barrels of condensate a day. A number of public and private sector refineries refine them, producing octane and petrol.

State-run Sylhet Gas Fields Ltd signed the deal with the consortium of PT Istana Karang Laut of Indonesia and Energypac Power Generation of Bangladesh at a ceremony held at the capital's Westin hotel on Tuesday.

The joint venture company is the EPC (engineering, procurement and construction) contractor of the project.

Under the agreement, a catalytic reforming unit will be set up at Rashidpur in Habiganj.  Once completed, it will produce about 2,800 barrels of octane and 25 tonnes of liquefied petroleum gas daily from condensate.

The project will be financed by Sylhet Gas Fields Company, said Nizam Shariful Islam, its managing director.   

Once the two plants are built and gone into commercial operation, the country's total demand for octane and petrol would fully be met, thus earning foreign currencies.

The project would help Bangladesh ensure energy security in the area of octane production, said Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister.

It would also help the country address the misuse of condensate, said Energy Secretary Nazimuddin Chowdhury.

Humayun Rashid, managing director of Energypac Power Generation, thanked the government for encouraging local companies, engineers and resources to undertaking the project.

Petrobangla Chairman Abul Mansur Md Faizullah called for completing the project on time.

Alain Dambron, a director of PT Istana Karang Laut, hoped his company would deliver the project within the stipulated two-year deadline.

Phillippe Supper, operations director of PT Istana Karang Laut, and Md Showkat Alam Quadri, company secretary of Sylhet Gas Fields Ltd, signed the deal on behalf of the respective parties.

Another 4,000 bpd condensate fractionation plant is being built in Rashidpur, which will be fed by the Chevron-run Bibiyana gas-field.

Petrol to be produced by the plant will be fed to the catalytic reforming unit for converting the petrol into octane, Islam said. Sylhet Gas Fields Ltd, a company of Petrobangla, runs five gas fields -- Haripur, Kailashtilla, Rashidpur, Beanibazar and Chhatak -- with 13 producing gas wells.