Bangladesh is going to have a third floating storage and regasification unit (FSRU) to be built by a Chinese company alongside the Bay island Maheshkhali as the government gives the go-ahead amid gas-supply disruptions.
The Cabinet Committee on Economic Affairs (CCEA) approved Tuesday the proposal placed on behalf of China National Energy Engineering & Construction Co Ltd (CNEE), at a time when the country reels from gas crunch following the tripping of one of two FSRUs on the Bay of Bengal island.
Officials said the CCEA gave its policy approval to process a fast-track proposal submitted by the Chinese firm to install a new FSRU at Kutubjom in Maheshkhali in Cox's Bazar.
The virtual meeting, chaired by Finance Minister Amir Khosru Mahmud Chowdhury, approved three separate proposals, including the Kutubjom floating terminal (FSRU), under a G2G (government-to-government) arrangement.
"The major policy approval marks the initial formal step toward developing another liquefied natural gas (LNG)-import facility. The energy-infrastructure project will be processed under a government-to-government framework," said one official.
Following an acute natural-gas shortage, the government has taken the decision on an urgent basis to foster the LNG regasification through import from overseas market.
Bangladesh currently relies heavily on imported liquefied natural gas to compensate for a steady decline in domestic gas production against rising demand.
Imported LNG is regasified through floating terminals before being injected into the national transmission network.
The domestic shortage significantly worsened following a recent fire and subsequent technical failure at an American company-operated Maheshkhali LNG terminal, which effectively halved the country's imported LNG-supply capabilities overnight.
The upcoming CNEE facility is expected to bolster national energy security as domestic gas reserves steadily decline.
Meanwhile, shutdown of the Maheshkhali offshore LNG terminal of Excelerate Energy, USA, after the fire on July 21 halved imported gas-regasification capacity.
Another FSRU, Summit LNG Terminal of Summit Group, in the Maheshkhali offshore area with 500-mmcfd capacity is currently providing crucial, sustained LNG injection into the national grid.
Bangladesh began importing LNG in 2018 through its first floating terminal at Maheshkhali to offset declining domestic gas production.
Besides the Chinese FSRU proposal, the Cabinet Committee also granted approvals for two other vital supply and trade proposals aimed at maintaining economic stability.
Of the two other endorsed proposals, the CCEA cut the fuel-oil-import-tendering-process time to 21 days instead of 42 days of Bangladesh Petroleum Corporation (BPC).
Besides, the cabinet body has in principle endorsed LNG-supply proposal from Gunvor LLC USA.
kabirhumayan10@gmail.com