Moheshkhali LNG terminal loan deal signing today

Dhaka,  Fri,  18 August 2017
Published : 11 Jul 2017, 00:41:40
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Moheshkhali LNG terminal loan deal signing today

FE Report


International Finance Corporation (IFC) signs a financing agreement with Excelerate Energy Bangladesh Limited today (Tuesday) to facilitate construction of the country's first LNG (liquefied natural gas) terminal at Moheshkhali island in the Bay of Bengal.

The IFC, the private sector arm of the World Bank, is set to finance the US-based company for developing the project in the form of debt- equity partnership -- 70 per cent debt and 30 per cent equity, said a senior Petrobangla official.

The terminal to be developed at an estimated cost of US$179.4 million will have a floating, storage and re-gasification unit (FSRU).

The IFC is set to lend up to $34.1 million for its own account and mobilise up to an additional amount of $91.4 million in parallel loans while the remaining cost would come from equity participation of the IFC and Excelerate.

In addition to Excelerate, IFC will own a minority equity share in the project company.

The LNG terminal will be located five-kilometre offshore Moheshkhali Island in southeastern Bangladesh, approximately 91-km south of the Chittagong Port.

Bangladesh inked final deals with the Excelerate Energy on July 18 last year for construction of the terminal. Excelerate will develop the FSRU on build-own-operate and transfer (BOOT) basis.

Excelerate would charge US$0.49 per Mcf (1,000 cubic feet) as its LNG terminal service.

Petrobangla would have to count an additional $0.10 per Mcf to cover other related costs, including fuel, tag boat operation, port facility etc.

Petrobangla will have to pay around US$159,186 per day as fixed component fees, $45,814 per day as operating component fees and $32,000 per day to the terminal operator under the approved deals.

Re-gasified LNG from the terminal would be sold on a take-or-pay basis to Petrobangla, which would have back-to-back gas sales agreements with power plant owners or operators and other consumers at the user end.

The FSRU will have berthing and mooring facilities for LNG tankers with a capacity of 138,000 cubic meters. It would have the capacity to supply around 500,000 Mcf per day of natural gas to Bangladesh's national gas grid.

The capacity could be increased to around 700,000 Mcf per day.

The tenure of the construction contract would be for 15 years.

Excelerate would have to complete construction of the FSRU within 18 months under the deal.

Petrobangla has estimated that the government would have to spend around $1.57 billion annually to import 182.5 Bcf per year of LNG from abroad at an estimated cost of $8 per Mcf.

With the construction of the LNG terminal the country would be able to feed the mounting natural gas requirement to consumers especially of industries and power plants with the imported LNG.

    Azizjst@yahoo.com
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