Bids invited from 4 firms to set up LNG terminal

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M Azizur Rahman The government has invited bids from four global firms to build the country's first liquefied natural gas (LNG) import terminal on Moheshkhali Island in Cox's Bazar in the Bay of Bengal, a top government official said Thursday. "We have short-listed the firms and asked them to submit bids by January 2012," Petrobangla chairman Dr Hussain Monsur told the FE. The firms include Singapore's Golar LNG Energy Ltd and a consortium of Astra Oil & Excelerate Energy, South Korea's Samsung C&T Corporation and India's Hiranandani Electricity Pvt Ltd. "An evaluation committee has chosen the firms considering their work experience and previous track-records," the Petrobangla chairman said. The planned LNG floating terminal will have the capacity to handle 5 million tonnes of LNG a year, re-gasification capacity of at least 500 million cubic feet per day (mmcfd) of gas, and berthing and mooring facilities for LNG ships with a capacity of 138,000-260,000 cubic metres. A three-kilometre sub-sea pipeline will run from the floating terminal to onshore custody transfer metering station on Moheshkhali Island. The contract is based on a build, own, operate and transfer (BOOT) basis for 15 years. Bangladesh has already inked a memorandum of understanding (MoU) with Qatar in January 2011 to import 4 million tonnes of LNG per annum from Qatar Petroleum in a bid to speed up LNG import. The deal paved the way for Bangladesh to emerge as the newest LNG importer in the global market, said an official. The private sector in Bangladesh has recently been allowed for the first time to import LNG under the country's newly formulated import policy, he added. The re-gasified gas from LNG will first be supplied to the port city of Chittagong, where the supply shortfall is most acute. Until the terminal is built, there is a limited capacity for the existing pipelines to take the gas to the southeastern Chittagong from the energy-rich northeastern Bangladesh, he added. The sharp decline in output at Bangladesh's sole offshore gas field Sangu, operated by Australia's Santos, has also prompted the move to build an LNG terminal near the port city. Sangu's output declined to as low as 13 mmcfd recently down from 220 mmcfd several years ago. Industry sources forecast Sangu will be depleted within the next year. LNG will also be required in the new LNG-based power plants as state-run Bangladesh Power Development Board is assessing bids from eight short-listed firms to build the country's first LNG-fed power plant. The board is eyeing to build a minimum 200 megawatt (mw) LNG-fed power plant on a build-own-and-operate (BOO) basis. The bid winner will sell the electricity it generates to the BPDB, while the transmission of power will be carried out by state-owned Power Grid Company of Bangladesh. Australian Poten & Partners is now assisting Petrobangla as consultant to implement the LNG terminal project. Petrobangla appointed the Australian firm in September, 2011 to provide support for execution of the international tender for building the LNG import floating terminal, LNG transmission and marketing in Bangladesh. Separately, state-owned Gas Transmission Company Ltd, or GTCL, has moved for laying a 91-km Moheshkhali-Anowara gas transmission pipeline with 30-inch diameter to carry re-gasified LNG from the terminal to the shore. Petrobangla had initially set a target to build the LNG floating terminal by 2012, when in June 2010 it sought expression of interest from global players to build the LNG terminal. "But it now seems that it will take beyond the projected timeline to complete the LNG terminal project due to delays in initial works," Mr Monsur said. "We, however, want to complete the remaining tasks as soon as possible to implement the project," he added.