Govt set to ink LNG deal with Qatar Petroleum

FE Team | Published: October 07, 2010 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The government is set to sign a deal with Qatar Petroleum to initiate formally the process to import liquefied natural gas (LNG) to meet the country's mounting energy demand, top officials said Wednesday.
Both the parties have already agreed on terms and conditions of the deal, which would help the government import LNG within the quickest possible time, they said.
A high-powered delegation led by energy secretary Mohammad Mesbahuddin will visit Qatar shortly to sign the deal.
The deal is expected to facilitate the government to bring in LNG for long term under the state-to-state negotiation.
Initially, Bangladesh will import LNG equivalent to gas supplies of 500 million cubic feet per day (mmcfd).
The country could be able to bring in more LNG after further talks, said a senior energy ministry official.
The price of LNG would be at par with the international market's, he said.
Qatar Petroleum has agreed to provide LNG only.
The government will have to build necessary infrastructure, including terminal, pipeline and arrange transportation to bring in the liquefied gas to the user-end.
Officials said the government is now working to build its first LNG import terminal.
It will offer the project before global investment players shortly.
Bangladesh Power Development Board (BPDB) might be the initial buyer of the Qatari LNG to run several gas-guzzling power plants in Chittagong.
Gas-fired power plants with total generation capacity of around 500 megawatts (mw) is currently out of operation in the country only due to gas supply shortfall.
BPDB is now taking around 800 mmcfd of gas from state-owned Petrobangla, but demand is at least 500 mmcfd higher.
Gas demand from power plants would be above 1300 mmcfd by 2014, said a senior PDB official.
"The LNG terminal will be built at Moheshkhali near the country's largest seaport in Chittagong," he said.
The imported LNG would be crucial for Chittagong as there is limited capacity in the existing pipelines to take gas to southeastern Chittagong from the energy-rich northeastern region.
The Ashuganj-Bakhrabad gas pipeline does not have the capacity to carry gas beyond 185 mmcfd from northeastern region to the southeastern Chittagong.
The pipeline is currently passing around 170 mmcfd.
The sharp decline in output from Bangladesh's sole offshore gas field, the
Cairn Energy-operated Sangu, has also prompted the government to consider importing LNG immediately.