Sources in the ministry of power told The Financial Express that theinvitation was in response to the NTPC's proposal made a year ago to theBangladesh government offering its assistance in setting up of a gas-bsedpower station in collaboration with the Bangladesh Power DevelopmentBoard.

"Bangladesh has an abundance of natural gas reserves and of the totalestimated reserves of 26-28 TCF, the country has thus far been able to drilla mere 7-8 TCF with the assistance of Unicol, Oxy, Shell and Craine,"revealed a senior ministry official.

However, despite the low output, Bangladesh has been unable to utilise thegas drilled so far which is available in developed gas fields in thatcountry ready for use.

In view of this, NTPC had made an offer to the Bangladesh government toassist in the development of a mega gas-based power station. It may bementioned that natural gas could be used both for generation of power aswell as fertiliser production. According to the proposal, NTPC had offeredto set up a gas-based power station in Bangladesh in collaboration with thegas supplying companies and the Bangladesh Power Development Board. Of thefour US multinationals which were assisting the country in gas drilling,there are only two left with Oxy being taken over by Unicol and Craine byShell.

However, initially the country had not responded to the overtures on accountof the strained bilateral ties and the wariness over the motive behind suchan offer, sources said. In fact, in the past one year, the political leadersof Bangladesh had openly expressed apprehension that gas from the countrycould be siphoned off by India if pipelines were laid through it.

In view of the recent thaw in bilateral relations as well as the acuteshortage of power in Bangladesh which has probably the lowest installedpower capacity in the world of 3,000 mw with a plant load factor of 50 percent, the country has recently decided to take a close look at the NTPCoffer. The projected demand growth for power in the country is a miniscule300 to 500 mw annually.

Sources in the ministry revealed that NTPC had offered to execute the megagas-based power station project in stages in accordance with the projectionsfor demand growth. The navratna has also offered to purchase whateversurplus power was generated by the power station and had also suggestedexport of surplus power to neighbouring Saarc countries. NTPC has alsooffered to contribute the leading share in terms of funding for the projectwhich is estimated to cost around Rs 6,000 crore. If accepted, the proposalwould not only provide NTPC a cheap source for purchase of power but wouldalso help it to generate foreign exchange earnings. But what, the ministrysources feel, would be the biggest advantage of executing such a project isthe goodwill it would generate.

"It would help India strengthen bilateral ties and prove its credibility andthereby facilitate purchase of natural gas from Bangladesh for its owngas-starved projects at Kawas, Gandhar and Anta which are normally short ofgas supply," said a ministry official.