The idea for creation of National Gas Transmission Company was conceived in the year 1987 on the basis of recommendation made by Coopers and Librand Associated, a Consultant appointed by DFID ( the then ODA) as a co-financier of multi-donor (IDA,CIDA,OPEC) funded Second Gas Development Project (SGDP). The terms of reference of the Consultant was to review the structure of Petrobangla and its companies concurrently with the Financial, Legal and Administrative framework and make recommendation for necessary changes, Accordingly they proposed to create a number of companies including a National Gas Transmission Company for fulfillment of covenants in the staff appraisal Report of SGDP in order to derive following benefits:

1. The separation of transmission from distribution is a very common practice where multifield production is to be piped over a large geographical area to a number of distribution region.
2. Separation of transmission system from distribution would enhance other customer services by the Distribution companies.
3. Separation of transmission system would ensure improved management of the National Gas Grid and allocation of gas to distribution Companies as per duly nominations.

Subsequently World Bank also carried out a study in-connection with the activities of the 3 (three) existing distribution companies and separation of transmission activities from the distribution companies as a covenant of Gas Infrastructure Development Project (GIDP). According the World Bank (IDA) Mission prepared a strategy paper on the need and justification of the formation of a National Gas transmission Company (NGTC).

Pursuant to recommendation of donor agency and taking into consideration the benefits of separate transmission entity, GOB decided to create Gas Transmission Company Ltd.(GTCL) entrusted with the responsibility to operate North-South Gas and Condensate Pipeline and implementation of 30″ dia 57.50 Km Ashugongj-Bakhrabad (A-B) Gas Transmission Pipeline – Key component of IDA funded Gas Infrastructure Development Project (GIDP) towards establishment of National Gas Grid. The objective of this was to divert surplus gas from fields located in the North-Eastern region toward Chittagong region to supplement gas deficit resulted in due to depletion of production from Bakhrabad Gas Field.

As per provision of Memorandum and Articles of Association and subsequent transmission strategy, GTCL would own operates, maintains and constructs all high pressure Gas transmission Pipeline under a phased programme. Moreover, GTCL shall solely be responsible for construction of future high pressure transmission pipeline.