LPG In Bangladesh

Liquefied petroleum gas (LPG), also called LP gas, is any of several liquid mixtures of the volatile flammable hydrocarbons propane, propane and butane, and butane used as fuel in heating appliances, cooking equipment, and vehicles. It is known to have been used as early as 1860 for a portable fuel source, and its production and consumption for domestic, industrial and vehicular use have expanded ever since. A typical commercial mixture of LPG may also contain ethane and ethylene, as well as a volatile mercaptan, an odorant added as a safety precaution.

It is being increasingly used as an aerosol propellant and a refrigerant, replacing chlorofluorocarbons (CFC) in an effort to reduce damage to the ozone layer. When specifically used as a vehicle fuel it is known as autogas.

LPG mixes are mostly propane (CH₈), mostly butane (C₄H₁₀), and, the most commonly known mixes are both propane and butane. In the northern hemisphere winter, LPG contains more propane, while in tropical areas it contains more butane. 

Propylene, butylenes and various other hydrocarbons are also generally present in small concentrations such as C₂H₆ , CH₄, and C₃H₈. An odorant, ethanethiol is also added so that leaks can be detected easily.

LPG is almost entirely derived from fossil fuel sources, as it is produced in oil refineries by refining crude oil, or extracted from "wet" natural gas. It was first produced in 1910 by Dr. Walter Snelling, and the first commercial products appeared in 1912.  It currently provides about 3% of all energy consumed.

LPG is a powerful clean versatile and easily portable energy source. It has a high energy to volume ratio.  LPG burns relatively cleanly with no soot and very little  sulfur emissions. The flame temperature of LPG is high (about 2,000^O Celsius) for which it is used to cut through steel. As it is a gas, it does not pose ground or water pollution hazards, but it can cause air pollution. LPG has a typical specific calorific value of 46.1 M J/kg compared with 42.5 MJ/kg for fuel oil and 43.5 MJ/kg for premium grade petrol (gasoline). However, its energy density per volume unit of 26 MJ/L is lower than either that of petrol or fuel oil, as its relative density is lower (about 0.5–0.58 kg/L, compared to 0.71–0.77 kg/L for petrol).  LPG is non-toxic and its spillage leaves no residue, and it generates very low emissions during combustion.

It all starts with nature.  Propane and butane, which make up LPG are naturally occurring.  The majority of LPG is recovered from natural gas and oil during their extraction, while the rest is a co-product of oil refining. 

Most natural gas wells are wet wells.  As natural gas comes out of the ground, it contains a number of other natural gas liquids (NGLs) that represents about 10 percent of the total volume.  These include among others, propane, isobutene and butane, that are otherwise known as LPG.  During processing of natural gas, some NGLs including propane and butane are separated out of the unprocessed gas stream.  Worldwide gas processing is the source of 60 percent of LPG produced.

In an oil refinery. LPG is produced at various stages, such as atmospheric distillation, reforming, cracking and others.  Refinery produced LPG may be between 1 and 4 percent of crude oil processed.  Worldwide refining is the source of about 40 percent of LPG produced.

Top 10 LPG Producing Countries (2018)

Top 10 LPG Consuming Countries (2018)

Transportation of LPG by pipelines is environmentally friendly in that it entails less energy consumption and exhaust emissions than other modes of transportation. Worldwide, there are over 220,000 miles (350,000 kilometers) of petroleum, refined products and LPG pipelines. However, there are no regulations or legislation that specifically mentions the pipeline transportation of the product. From a safety point of view, although LPG is non-toxic, it can be very dangerous if not handled properly.

For transportation by sea vessels in bulk, gases are always liquefied simply because more cargo can be filled in a given volume. Typically, but dependent upon the product, 1 volume of liquefied petroleum gas (LPG) is equivalent to over 250 volumes of vapor and 1 volume of liquefied natural gas (LNG) is equivalent to 600 volumes of vapor. Carrying and handling liquefied gas cargo onboard poses significant potential hazards including risk of injury or death, threats to environment, and each person working on a gas carrier and terminal ashore needs to understand the risks involved, obtain the necessary training and take all the needed precautions.

In Bangladesh LPG was introduced as a cooking fuel in September 1978 with production of about 16,000 tons by Eastern Refinery (ERL).  ERL transferred it to LP Gas Limited for bottling it for sale to the three oil marketing companies, Padma Oil Co. Ltd. (POCL), Jamuna Oil Co. Ltd. (JOCL) and Meghna Petroleum Ltd. (MPL), for distribution.  ERL, LP Gas Limited and the oil marketing companies are all subsidiaries of state-owned Bangladesh Petroleum Corporation (BPC).  Later since September, 1998 Petrobangla’s subsidiary company Rupantarito Prakritik Gas Co. Ltd. (RPGCL) LPG has been producing at Kailashtila from NGL produced by another Petrobangla company Sylhet Gas Fields Ltd. (SGFL).  The yearly production capacity of ERL and RPGCL plant together is about 22,000 MT (16,000 MT & 6000 MT respectively). The sale of LPG remained restricted by the production capacity. 

On January 5, 1996, with the adoption of National Energy Policy (National Energy Policy 1996), private sector was allowed for LPG import, storage, bottling and distribution.  As GNI grew, demand for clean fuel also started growing to replace biomass fuels and other fossil fuels.  In 1999, private sector operation of LPG began with Bashundhara Group entering the LPG bottling and marketing. Gradually other private enterprises started LPG business, and now as many as 28 companies in the private sector are in this fast growing energy business.   Most of the private sector LPG bottling plants are located in Mongla and Chittagong coastal areas.  Another 25 private companies have obtained BERC license for setting up LPG bottling plants.

The locally produced LPG in the refinery and Kailashtila Gas field, is transferred to LPG bottling plants by pipeline free of transport cost.  The locally produced LPG in cylinders is therefore much cheaper than the imported products, albeit the local product is only a small fraction of the total quantum consumed in the country.  LPG being import dependent, the product comes in on LPG carriers.   20 of the 28 private sector companies import LPG through international traders by mostly small shallow draft carriers of 2,000 – 5,000 ton carrying capacity.  The cost of carriage by small vessels works out higher than larger vessels carrying larger quantities. However, one private company in Chittagong produces LPG by processing Naphtha purchased from ERL.  Approval has been given for export of filled cylinders to the neighboring country.

In 1970s, when with 16,000 tons LPG came in the market, it replaced some of the other commercial fuels, and biomass fuel was 70 percent of the total cooking fuel in the country.  Even today, study results show that biomass fuels account for about 75 percent of cooking fuels.  It would be of interest to know that the National Energy Policy 1996 mentions “Direct and total replacement of biomass fuels by commercial energy will be prohibitive for financial and infrastructural constraints.  Biomass fuels will therefore continue to play an important role in energy scene of the country for many years to come”.  Even after 25 years the observation of the National Energy Policy 1996 on use of biomass fuels has remained valid.

Consumption of LPG has been constantly rising and from 50,000 tons in 2008, the quantity of LPG consumed in the country was 1.02 million tons in 2020, and is expected to rise to 2 million tons in 2030.  85 percent of LPG is consumed for domestic cooking, total number of households using LPG is about 3.8 million but per capita consumption of LPG is the lowest among the countries in Asia-pacific region.  Taking 5 persons in a family, about 11 percent of the country’s population use LPG for domestic cooking, while 13 percent have natural gas, and remaining population depends on biomass fuels for domestic cooking. It is projected that LPG consumption in 2030 would be 2.0 million tons for cooking in the country.

A recent survey shows that 37 percent of LPG as cooking fuel is consumed in Dhaka, 12 percent in Khulna, 12 percent in Rajshahi, 8 percent in Rangpur, 6 percent in Mymensingh, 4 percent in Barishal and 3 percent in Sylhet division. The study predicts that 35 percent of LPG would be consumed in Rajshahi, Rangpur, Khulna and Barishal divisions in 2025, when the total consumption for cooking would be about 1.8 million tons. LPG cylinders are carried mostly by trucks from the bottling plants to the retailers.  But to carry 12 kg/12.5kg gas in one cylinder the load weighs 30 – 33 kg including the weight of the container.  This raises the carrying cost.

Among other uses of LPG, Autogas, LPG for automobile, is a prospective area.  In the face of gradual decline in availability of CNG, LPG is becoming a chosen option for automobile as it is clean, environment-friendly product and has higher octane rating than normal premium gasoline.  Autogas already accounts for about 4 percent of LPG in the country.  To encourage use of autogas, a policy, known as Autogas Refueling Station, Conversion Workshop Setting up and Operation Policy was adopted in 2016 by the Energy & Mineral Resources Division of the Ministry of Energy & Power.  In accordance with the policy, 13 private sector companies have already obtained approval for setting up refueling stations.  There are about 6,000 autogas vehicles and 120 refueling stations in the country.  It is easy to convert petrol engine to use autogas, while diesel engine conversion is difficult and expensive. Conversion kits can switch a vehicle dedicated to gasoline to using a dual system, in which both gasoline and LPG are used in the same vehicle.

It would be of interest to know that in the early stage of use of LPG as an alternative fuel in Bangladesh, autogas was introduced as its demand for cooking was not enough to utilize the entire production of ERL/LP Gas limited. But this had to be discontinued within a few years to meet the fast growing demand of the domestic cooking. Auto­­­­­­­­­­­­gas is used in large quantities most countries in Europe. The other 10 countries using large volume of autogas are­­­­­­­­­­­­­­ Turkey, South Korea, Poland, Ukraine, Mexico, Thailand and China.  Consumption of LPG as autogas in these 10 countries in 2018 wa­­­­s­­­­­­­­­ 18.48 million tons, while world consumption was 26.20 million tons.  Bangladesh consumed 15,000 tons of LPG as autogas. Number of Autogas vehicles in the world in 2018 was 27 million and worldwide autogas refueling stations was 80,700.

LPG Pricing

Price of LPG supplied by LP Gas Ltd. is fixed by BPC, and buyers are able to get it at the fixed price, while the privately bottled LPG prices have been different for different companies.  The Consumers Association of Bangladesh (CAB) submitted a writ petition to the Honorable High Court seeking direction for fixing the price of LPG supplied by the private companies.  The Honorable High Court issued the following order on 25 August, 2020.

“The respondents are directed to give a report to this court regarding the action of the re-fixing of the LPG tariff by holding a public hearing considering the representation of the petitioner within 30 (thirty) days from the date of receipt of a copy of this order.” 

In compliance with the High Court Order, Bangladesh Energy Regulatory Commission (BERC) very recently announced a tariff order fixing the prices of LPG supplied by both LP Gas Ltd. and the private sector suppliers by holding a public hearing. BERC has also ordered the composition of LPG as 35:65 of propane and butane for the LPG imported by the private sector companies. But the LPG produced by ERL has 30:70 and That of RPGCL has 50:50 of the gases.  It may be noted that LP Gas Ltd. supplied cylinders contain 12.5 kg LPG each, while those of the private suppliers have 12.0 kg LPG each as well as other sizes too

As a result of BERC order, it is expected that customers would get supply of LPG at the fixed prices.

Hazards

Liquefied petroleum gas (LPG) is a highly flammable gas and is dangerous if not used safely. Because it is easily ignited, one should know how to stay safe when using and storing it.

An empty container that contained LPG is nominally empty but may still contain LPG vapor and be potentially dangerous. Therefore all LPG containers should be treated as if they were full.

LPG is approximately twice as heavy as air when in gas form and will sink to the lowest possible

LPG forms a flammable mixture with air in concentrations of between 2% and 10%. It can, therefore, be a fire and explosion hazard if stored or used incorrectly.

LPG-air mixtures arising from leakages may be ignited close to the point of leakage and the flame can cause explosion of the container. 

LPG can cause cold burns if in contact with the skin, or act as an asphyxiate (meaning you won’t be able to breathe) if present in high concentrations.

Breathing in LPG can make one sick.

It is, therefore, important that LPG suppliers explain these hazards to the customers to be careful in handling the LPG containers.