Petrobangla inks first deal with Qatari co to import LNG

Bangladesh's state-run Petrobangla has inked a 'confidentiality' deal with Qatar's Ras Gas in Doha last week to facilitate import of liquefied natural gas (LNG) to meet the country's mounting natural gas demand, said officials.
"We have inked the deal and held talks initially over pricing mechanism of LNG, required quantity, timing of import etc," Petrobangla Chairman Istiaque Ahmad told the FE Wednesday.
This is the first such agreement by Bangladesh to import LNG from any foreign country to ease energy crisis.
The country is now reeling under acute natural gas crisis with the average output of around 2,700 million cubic feet per day (mmcfd) against the demand for over 3,200 mmcfd.
The country started facing natural gas crisis from 2009 with the rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, CNG filling stations and households.
Officials said Bangladesh had inked a memorandum of understanding (MoU) with Qatar in January 2011 to import around 4.0 million tonnes of LNG annually.
It extended the MoU with Qatar several times with the latest one to expire in May 2016.
Bangladesh is currently working to build two separate LNG terminals on Moheshkhali Island in the Bay of Bengal -- of which one will be land-based and another offshore.
Bangladesh on January 25 inked a term sheet for the terminal-use agreement with US Excelerate Energy Ltd Partnership to build the country's first floating LNG terminal.
The US firm has already carried out a met-ocean study and found building of the terminal viable, said Ahmad.
Excelerate would carry out a geotechnical study, detailed engineering design before starting construction of the LNG terminal which will have a floating storage and re-gasification unit.
The American energy firm will build the terminal within 16 months after the final deal, he added.
LNG import might start in early 2017, he said.
The terminal will have a capacity of 5.0 million tonnes per year and a re-gasification capacity of at least 500 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 basis for 15 years.
Separately, Bangladesh's state-run Power Cell has selected three international firms for awarding contract to build an onshore LNG terminal at Matarbari in Moheshkhali Island in the Bay of Bengal.
The firms are Japan's Mitsui & Co Ltd, India's Petronet LNG Ltd, and Royal Dutch's Shell EP International Ltd, Director General of the Power Cell Mohammad Hossain told Platts earlier.
The selected firms will be requested to submit final proposals including costs and equipment and technology to be adopted to build the terminal, he added.
    The onshore LNG import terminal in the south -- with a handling capacity of 3.5 million tonnes per year -- would be built on a build, own and operate basis.
     Regasified LNG from the terminals would be sold on a long-term, take-or-pay basis to a state-owned entity, which will have back-to-back gas sales agreements with power plant owners or operators and other customers, said Hossain.
    mazizur.rahman@outlook.com