The International Finance Corporation (IFC) of the World Bank Group will provide 25 per cent of the cost of building the first floating LNG terminal of the country.
The IFC signed a deal Tuesday with the contractor of the terminal-Excelerate Energy Ltd Partnership of the US-, Petrobangla chairman Istiaque Ahmad told the FE Tuesday.
The liquefied natural gas (LNG) terminal will be a floating storage and re-gasification unit and it will be located at Moheshkhali island.
The Excelerate Energy earlier in January had projected that a total investment worth US$ 500 million would be required to build the terminal. Of the amount, $200 million will be needed to build fixed infrastructure including pipeline and mooring system and $300 million for FSRU (floating storage re-gasification unit) ship.
"This is good news for us as the World Bank has shown interest to fund the project cost," Mr Istiaque Ahmad said.
However, detailed terms for the project financing by the IFC were not available immediately.
Meanwhile, the US firm found the 'met-ocean' study over building of the LNG terminal positive.
"The Excelerate officials presented the study report to Petrobangla today (Tuesday) in the city and found it feasible for building the LNG terminal there," he said.
Considering the weather conditions, the terminal might be required to keep shut for three months in a year, from July to September, the study revealed.
Petrobangla will ink another agreement with the US firm to use the terminal before the start of the construction work of the LNG terminal, he said.
Detailed commercial and technical issues including the terms and conditions of LNG terminal operation, duration of use, rate of tariff, mode of payment, etc would be spelled out in the document, he said.
However, the US firm submitted a draft of the document on terminal operation Tuesday.
"We shall appoint a consultant and finalise the draft thereafter," the Petrobangla chairman said.
The Excelerate Energy will build the terminal within 16 months after the final deal.
LNG import might start from early 2017, he expressed the hope.
The government signed an initial deal with the Ecelerate Energy and Astra Oil consortium on June 26, 2014 to build the terminal after several years of negotiations.
The LNG terminal would have a storage capacity of five million tonne per year and a re-gasification capacity of at least 500 million cubic feet per day (mmcfd).
It will have berthing and mooring facilities for LNG tankers with a capacity of 138,000-260,000 cubic metres, with the construction contract to be awarded on a build-own-operate-transfer (BOOT) basis for 15 years.
Petrobangla will have to pay a gross yearly payment of $86.5 million annually to the contractor consortium.
Bangladesh currently does not have any LNG import deal with any country or firm.
It has a memorandum of understanding (MOU) with Qatar to import LNG.
mazizur.rahman@outlook.com
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