LNG terminal deal with US firm by Apr

Dhaka,  Tue,  26 September 2017
Published : 28 Feb 2016, 00:22:21

LNG terminal deal with US firm by Apr

FE Report

The government is set to ink final deal with the US-based Excelerate Energy Ltd by April next to build the country's first liquefied natural gas (LNG) terminal at Moheshkhali Island in the Bay of Bengal.

State-owned Petrobangla will sit for a final round of negotiation with Excelerate in Dhaka this week to settle the pending issues, a senior Petrobangla official told the FE Saturday.

A delegation of the Petrobangla visited the USA early this month to reach a consensus over the issues that still remain unresolved.

Officials said the Petrobangla on January 25 last year signed a term-sheet for terminal-use agreement with Excelerate to build the LNG terminal.

Excelerate has already carried out a met-ocean study and found building of the terminal viable.

The firm is also carrying out a geo-technical study and detailed engineering design before starting construction of the LNG terminal, which will have floating storage and re-gasification unit.

The US firm will build the terminal within 16 months of signing of the final deal. The LNG import might start early 2017, the Petrobangla top official said.

The terminal will have a capacity of 5 million tonnes per year and a re-gasification capacity of at least 500 million cubic feet per day (mmcfd).

It will have berthing and mooring facilities for LNG tankers with a capacity of 138,000-260,000 cubic metres (cu m), with the construction contract to be awarded on a build-own-operate-transfer basis for 15 years.

Separately, the Power Cell, a state-owned entity, is also working to build Bangladesh's first onshore LNG terminal at Matarbari on Moheshkhali Island.

It has already short-listed four firms for awarding the contract.

The Power Cell sought to build the onshore LNG import terminal in the south -- with a handling capacity of 3.5 million tonne per year on a build-own-and-operate basis.

Re-gasified LNG from the terminals is expected to be supplied to gas-guzzling industries including power plants and factories.

Re-gasified LNG from the terminal will be sold on a long term, take-or-pay basis to a state-owned entity, which will have back-to-back gas sales agreements with power plant owners or operators and other customers.

The Petrobangla has inked a 'confidentiality' deal with Qatar's Ras Gas in Doha in October last year over its planned import of LNG to meet mounting natural gas demand of the South Asian country.

This is the first such agreement by any Bangladeshi company to import LNG.

The country is now reeling under acute natural gas crisis with the daily average output of around 2,700 mmcfd against the demand for over 3,200 mmcfd.

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