The government has not yet conducted any study over the probable costs of imported liquefied natural gas (LNG), although it has moved to build the country's first-ever LNG import terminal on fast-track basis, a top government official said Monday.
He said the government was now enquiring about the costs of LNG from different LNG exporting countries including Qatar, Australia, Indonesia, Malaysia, Russia etc.
LNG prices vary across the world considering the distance between the importing countries and the sourcing countries.
The free on board (FOB) prices of LNG in different source countries vary within the range of US$ 12-US$ 15 per Mcf (1,000 cubic feet).
The government is, however, at the final stage of negotiation with the US consortium of Astra Oil and Excelerate Energy for building the LNG import terminal.
The Energy and Mineral Resources Division (EMRD) under the ministry of power, energy and mineral resources is now scrutinising the final proposal from the US consortium.
The US consortium in its final proposal has sought maintenance fees to keep its equipment and infrastructure of the LNG terminal running until the country starts importing LNG.
The consortium has also agreed to pay US$ 2.0 million as bid bond.
It has also agreed to pay penalty in case of its failure to provide required service after the import of LNG.
The consortium has agreed to provide US$ 20 million as performance guarantee in line with the tender requirement.
Astra Oil and Excelerate Energy consortium was selected primarily as the contractor to build the LNG terminal in August, 2012, after a competitive bidding.
The consortium submitted its final proposal to Pterobangla for building the LNG terminal on Moheshkhali island in the Bay of Bengal a couple of weeks ago.
Petrobangla has subsequently submitted the US consortium's proposal to the EMRD for final approval.
The maintenance fee and penalty money would be fixed after negotiation with the US consortium, said a ministry official.
After a long delay over the implementation of the project, the task including selection of a contractor, since Petrobangla floated the construction tender in November 2010, the incumbent government in January 2014 put the country's first-ever LNG import terminal project on a fast-track route for execution on a priority basis.
Petrobangla in February 2014 re-invited the US consortium to visit Bangladesh and negotiate.
Petrobangla is planning to launch the LNG import terminal with a capacity to handle 5 million tonnes of LNG per year and a re-gasification capacity of at least 500,000 Mcf per day.
It will have berthing and mooring facilities for LNG vessels with a capacity of 138,000-260,000 cubic metres, with Petrobangla looking forward to awarding the construction contract on a build-own-operate-transfer basis for 15 years.
Petrobangla floated the construction tender in November 2010, and selected a US consortium comprising Astra Oil and Excelerate Energy in August 2012.
But the awarding of the tender was delayed due to factors such as procedural complicacies and lack of funds.
In its initial bid, the US consortium sought $0.39 per Mcf as a processing fee to cover the installation cost of the LNG terminal.
It also had sought engineering, procurement and construction (EPC) contract fee and credit support.
Bangladesh had already entered into memorandum of understanding (MoU) with Qatar over the import of LNG, until June 2015, as it is confident it would be able to import LNG by then after completing the launch of the LNG terminal project.
Bangladesh signed the MoU with Qatar Petroleum in January 2011 to import 4 million tonnes of LNG per year, but has yet to receive any imports as it has no receiving infrastructure.
Building the LNG import terminal is critical for the energy-starved south-eastern Chittagong region.
Chittagong, which was once almost self-reliant in natural gas, started facing a supply crisis in 2006 as output had diminished at the Sangu gas field.
Bangladesh's sole offshore gas well, Sangu-11, was permanently closed in October 2013.
Govt enquiring about probable costs of imported LNG as study not yet done
M Azizur Rahman | Published: April 08, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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