Supply of re-gasified LNG hits bumps

The delays in construction of necessary pipeline along with tie-up and 'synchronisation' complexities have held up the supply of re-gasified LNG (liquefied natural gas) to consumers.
Although the first consignment reached the country on April 24, the government has not completed the necessary work to commission the supply of re-gasified LNG.
"I hope the pipeline would be constructed soon to initiate the commercial supply of LNG by May 21," Petrobangla chairman Abul Mansur Md Faizullah told the FE Wednesday.
But industry insiders said it might be delayed further as the pipeline construction is facing a major hurdle, crossing the Karnaphuli River.
The US-based Excelerate Energy Bangladesh Ltd (EEBL) brought in its floating, storage and re-gasification unit (FSRU) -- Excellence -- after loading 136,009 cubic metres of lean LNG from Qatar's RasGas.
Even after the construction of the pipeline, the re-gasification unit might be able to evacuate only half the re-gasified LNG from the day one, said officials.
This will put the government at the 'capacity payment' risk from the day one of the commercial operation of the country's first LNG import terminal.
Petrobangla must pay around US$ 245,000 per day to the contractor, no matter what it takes -- less re-gasified LNG or full capacity under the sales and purchase agreement (SPA), a senior Petrobangla official said.
Synchronisation and tie-up job is underway and the construction of the pipeline is also in progress, he said.
But the construction of the 30-kilometre and 42-inch diameter Anwara-Fouzdarhat gas transmission pipeline now seems to be a major hurdle.
Officials said the state-run Karnaphuli Gas Distribution Company Ltd (KGDCL), the distributor for the Chattogram region, would be able to consume only around 250 mmcfd or half the terminal's capacity with its existing pipeline.
Petrobangla signed 'terminal use agreement' and 'implementation agreement' with the US company on the LNG terminal project, 'Moheshkhali Floating LNG Terminal,' on July 18, 2016.
Excelerate built the re-gasification unit on the build, own, operate and transfer (BOOT) basis, he said. It would charge US$ 0.49 per mcf (1,000 cubic feet) against its service from the day one.
Petrobangla will buy re-gasified LNG from the terminal on the take-or-pay basis, said the official.
Currently, the government is paying a substantial amount of money as 'capacity payment' to owners of oil-fired power plants as the penalty for not consuming required quantity of electricity.
Gas-hungry Chattogram could consume around 250 mmcfd of re-gasified LNG as the port city did not have a significant number of new industries or extensions over the past one decade due to natural gas crisis, a senior Karnaphuli official said.
Gas consumption by industries remains negligible as the country does not have many heavy industries requiring higher natural gas consumption. Some 100 new industries can consume as much as 25 mmcfd of gas, he said.
Several big gas-fired power plants in the Chattogram region, including those of Rawzan and Shikalbaha, are not also in a good state to consume natural gas consistently, he added.
The Karnaphuli is responsible for supplying piped natural gas to Chattogram, Rangamati, Khagrachhari, Bandarban and Cox's Bazar districts.
The local Summit group is building the country's second re-gasification unit at the same location -- Moheshkhali Island -- in the Bay of Bengal.
When contacted, energy adviser of the Consumers Association of Bangladesh, the advocacy group, Dr M Shamsul Alam criticised the government's wholesale decision of awarding the private sector with the contracts to build the LNG terminals.
"It was done to ensure business of the private sector at the cost of public money," he said. "Their activities are similar to those of the East India Company."

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