ADB, IDB to provide $800m for first LNG-based power plant

Dhaka,  Mon,  25 September 2017
Published : 13 May 2017, 22:41:39

ADB, IDB to provide $800m for first LNG-based power plant

M Azizur Rahman

Multilateral donor agencies have committed to providing financial assistance worth US$800 million loan to set up a single power plant based on imported LNG.

This will be the country's first power plant which will run on re-gasified imported LNG, said officials.

Of the total lending, ADB will provide $600 million and Islamic Development Bank (IDB) $200 million to implement the 800 megawatt (MW) combined cycle power plant at Rupsha in the country's southern Khulna region, they said.

The power plant will have two gas-fired units, each having 400 MW capacity to run on imported liquefied natural gas (LNG).

The government would provide the remaining amount of $150 million for its implementation.

The government has planned to build the country's first LNG-based power plant by mid-June 2019 as its domestic natural gas output is failing to match the mounting demand, a senior official of the Ministry of Power, Energy and Mineral Resources (MPEMR) told the FE Saturday.

He said state-owned North West Power Generation Company Ltd (NWPGCL) has already invited bids from potential firms to build the power plant.

Some 125 million cubic feet per day (mmcfd) of re-gasified LNG would be required to generate electricity from the proposed plant.

The NWPGCL will be the implementing authority of the power plant while state-run Petrobangla would provide the required quantity of re-gasified LNG (RLNG), NWPGCL managing director Md Khorshedul Alam said.

The power plant is expected to start operation by June 2019, he said.

The bid submission deadline is July 12.

Bangladesh expects to start importing LNG from early 2018 through the country's first floating storage and re-gasification unit (FSRU) which is currently being developed by US-based Excelerate at Maheshkhali Island in the Bay of Bengal.    

The FSRU, the first of several others in pipeline for Bangladesh, would be ready for operation by 2017.

Exccelerate's FSRU would have the minimum capacity to handle 500 mmcfd of imported gas.

Petrobangla assigned Excelerate to build the LNG terminal and has already moved to arrange funding for import of LNG.

It has sought $1.4 billion from the government to foot LNG import bill in 2018, which is around 77.77 per cent of the estimated total cost of import, said a senior Petrobangla official.

Petrobangla has estimated that it would have to spend around $1.57 billion annually to import 182.5 Bcf of LNG per year from abroad at an estimated cost of $8 per Mcf (1,000 cubic feet), he added.

The LNG for the power plant might be imported from India or Qatar through Petrobangla, said officials.

The NWPGCL earlier held several rounds of talks to import re-gasified LNG from India to implement the power plant project.

India's H-Energy Pvt Ltd, GAIL (India) Ltd and Adani are keen to supply the fuel.

Separately, Petrobangla is currently in a negotiation with Qatar's RasGas to import LNG.

It is also in talks with India's Reliance Power Ltd for import of LNG.

Bangladesh is now reeling under acute natural gas crisis with the daily average output of around 2.70 Bcf per day against the demand for over 3.30 Bcf per day, according to Petrobangla.

Bangladesh started facing natural gas crisis from 2009 with rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, CNG filling stations and households.
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