The government is contemplating to provide state-run Petrobangla with an initial revolving fund of Tk 54.82 billion to facilitate importing LNG (Liquefied Natural Gas) for meeting the country's growing demand for energy.
Officials said the Energy and Mineral Resources Division (EMRD) already requested the finance ministry to arrange the fund for financing the initial small-scale imports of the fuel.
"Recently, we sought a revolving fund from the finance division for purchasing LNG and completing other related works," deputy secretary of the EMRD Zanendra Nath Sarker told the FE.
The finance ministry was working on fund requisition by the EMRD, said an official, who deals with the issue, on Wednesday.
The government decided to import LNG due to the present short-supply of natural gas, the reserve of which is depleting fast. The country is currently facing a natural gas shortage of around 600 mmcfd, with output of around 2,700 mmcfd against a demand for over 3,300 mmcfd, according to Petrobangla.
The government meanwhile completed preparatory activities to import the LNG, including signing of one sales and purchase agreement (SPA) and memorandum of understanding with few other foreign companies, they said. The contract documents like that of LNG import price were at the final stage.
As per the negotiations done so far, the companies would supply LNG after re-gasification, a high official of the EMRD said.
More or less 200 mmcf of LNG will be imported daily through using three separate jetties of Chittagong Urea Fertiliser Factory, Karnaphuli Fertiliser Company Limited (KAFCO) and Sangu, according to the Petrobangla. Around 600 mmcf LNG will be imported through the three channels.
Officials were expecting that it would be possible to supply the imported LNG after re-gasification to national grid from September next.
It is, however, often claimed by state minister for energy Nasrul Hamid that the LNG import would start from April next.
Excelerate Energy Bangladesh limited (EEBL) has set a target to import 500 mmcf gases daily from April 2018 and Summit LNG terminal co. (Pvt.) has also set a target to import same amount of gases everyday from October, 2018.
The imported LNG will be supplied to the important industries and other organisations of Dhaka and Chittagong areas on priority basis. The process has already been finalised, a senior official of the EMRD said.
According to an EMRD document obtained by the FE, some Tk 118.42 billion would be required to prepare the LNG import facilities -- construction of Floating Storage and Re-gasification Unit (FSRU) by the EEBL and Summit, LNG import, terminal operation, customer letter of credit (SBLC) and latent heat capture system, import of LNG through the jetties of Chittagong Urea Fertiliser Factory, Karnaphuli Fertiliser Company Limited (KAFCO) and Sangu, and other operations.
Of the amount, some Tk 63.60 billion would be met from the Energy Security Fund and the rest Tk 54.82 billion would have to be met from the national exchequer. Currently, nearly Tk 2.0 billion is being deposited to the Energy Security Fund per month.
Bangladesh Energy Regulatory Commission (BERC) has already approved in principle to mobilise Tk 69.22 billion from the Energy Security Fund for SBLC, latent heat capture system and, revolving fund for importing LNG and relevant operations, according to the document.
To facilitate long-term imports, Petrobangla signed the first-ever sales and purchase agreement (SPA) with Qatar's RasGas on September 25 to import 2.5 million tonnes per year of lean LNG for 15 years.
It is eyeing to sign more SPAs soon as the country is in negotiations with four other potential LNG suppliers. Necessary MOUs with the suppliers have already been signed in this regard.
Meanwhile, the country's first LNG import terminal, a 3.75 million tonne per year floating storage re-gasification unit (FSRU) being developed by US-based Excelerate Energy, is expected to be commissioned in April 2018; and its second, also with a capacity of 3.75 million tonne per year, is being developed by Summit Group and is expected to be commissioned by end-2018.
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