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Now govt mulls building bigger LNG terminal

FE Report | January 03, 2018 00:00:00

The government now intends to build a bigger-sized LNG import terminal having the capacity of 7.5 million tonnes per year (Mtpa) instead of 5.5 Mtpa to meet the demand for natural gas in future.

State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) has already amended the term, seeking proposals from interested contractors for the construction of a 7.5 Mtpa capacity FSRU-based LNG re-gasification terminal at offshore of Payra in Patuakhali, a senior RPGCL official said.

The selected contractor will build the LNG (liquefied natural gas) import terminal on a build-own-operate-transfer (BOOT) basis for 25 years instead of 15 years planned earlier, he said.

The FSRU should have the LNG storage capacity of 260,000 cubic metre and re-gasification capacity of 1,000 million cubic feet per day (mmcfd).

The terminal company will also construct necessary marine facilities including subsea gas pipeline and arrange dedicated port service, he said.

Bangladesh is expecting to complete the construction of the terminal by June 2019.

Interested contractors must have to send their expressions of interest (EOI) to the RPGCL before the deadline ends on January 30.

This will be the country's largest but the fourth FSRU-based LNG import terminal, although the previous three are at construction stage.

Bangladesh is expecting to start LNG imports early 2018 and is making concerted efforts to move forward with the relevant infrastructure.

The country's first LNG import terminal, a 3.75 Mtpa FSRU being developed by US-based Excelerate Energy, is expected to be commissioned in April 2018 and its second, also with a capacity of 3.75Mtpa, being developed by Summit Group, is expected to be commissioned by October 2018.

Both the FSRUs will be located on Moheshkhali Island in the Bay of Bengal, and ownership of the vessels will be transferred to state-owned oil and gas company Petrobangla after 15 years of operations.

The third FSRU having the similar capacity of a 3.75 Mtpa will be built by Indian Reliance at Kutubdia Island.

Qatar's RasGas and Petrobangla signed the much-hyped final sales and purchase agreement (SPA) on September 25 to import 2.5 Mtpa of lean LNG for 15 years.

Bangladesh is eyeing to ink more SPAs soon as the South Asian country is in negotiations with four other potential LNG suppliers with whom it has inked MoUs to import LNG.

Gunvor Singapore Pte Ltd was the latest to sign MoU with Petrobangla on September 19, raising the total number of such deals to five including that of Qatar and three in September.

It inked MoU with Switzerland-based AOT Energy on June 13, Oman early September and Indonesia on September 15.

Separately, Bangladesh is seeking to import spot LNG from suppliers taking advantage of a downtrend in LNG pricing in the global market.

The country is currently grappling with an acute natural gas shortage, with output of around 2,700 mmcfd against the demand for over 3,300 mmcfd, according to Petrobangla.

Bangladesh started facing natural gas crisis from 2009 with a rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, CNG (compressed natural gas) filling stations and households.

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