An initial agreement will be signed today (Thursday) with a US consortium, capping hectic negotiations, for building the country's first floating liquefied natural gas (LNG) terminal on the Bay of Bengal, officials said.
The state-owned Petrobangla completed negotiations with a visiting delegation of the US consortium and decided to ink an initial deal on the proposed LNG terminal.
"The US consortium of Astra Oil and Excelerate Energy and Petrobangla had been locked in three days of final negotiations since Monday last before reaching a conclusion Wednesday," Petrobangla Chairman Dr Hussain Monsur told the FE.
As per the arrangement the US consortium would build a two-to-three-kilometre-long subsea pipeline, carry out feasibility study, geotechnical and met ocean study regarding the floating LNG terminal project at Moheshkhali island on the Bay of Bengal, he said. The subsea pipeline would be built from the proposed floating LNG terminal to facilitate delivery of re-gasified natural gas to the user ends, said the official.
The US consortium agreed to pay a US$2 million bid bond and a penalty if it failed to provide the necessary services and to provide a $20 million performance guarantee.
Petrobangla has agreed to provide maintenance fees to the US consortium to keep the proposed LNG terminal operative until LNG import starts.
The fees would cover the cost of maintaining a completed terminal in the event there was a delay in the start of LNG imports, the official said.
Petrobangla would provide $0.39 per Mcf (1,000 cubic feet) as a processing fee to cover installation costs of the LNG terminal.
After inking Thursday's initial agreement Petrobangla requires to get final seal of approval from the cabinet committee on government purchase before the final deal signing.
The consortium would build the terminal within 16 months of signing the final deal.
The government expects to ink the final deal with the US group by December 2014 and start importing LNG in 2016.
Bangladesh had extended a memorandum of understanding with Qatar over the import of 4 million tonnes of LNG annually, which expired in March 2013, until June 2015 and is confident of completing the floating LNG terminal project by then.
However, it has not yet signed a final import agreement, which is what prompted the chosen US consortium to seek a provision for maintenance fees.
