US consortium submits final proposal for building LNG terminal next week

The consortium of Astra Oil and Excelerate Energy of the US is set to submit the final and concrete proposal to state-owned Petrobangla next week to build the country's first liquefied natural gas (LNG) import terminal at Moheshkhali island in the Bay of Bengal, a top government official said.
A team of experts and professionals of the US consortium visited the project site last week and enquired about relevant details before submitting its proposal, he said.
"The US consortium will be awarded the project work if the proposal is acceptable," Petrobangla Director Md Quamruzzaman told the FE.
The Petrobangla earlier selected conditionally the US consortium for building Bangladesh's first floating LNG terminal. But later no deal was inked as there were several issues still unresolved.
In its initial bid, the US consortium sought $0.39 per Mcf (1,000 cubic feet) as a processing fee to cover the installation cost of the LNG terminal.
It also had sought engineering, procurement and construction (EPC) contract fee and credit support.
To break the ice and start negotiation, the Energy Ministry in November 2013 agreed to receive US$11 million as performance guarantee, 45 per cent lower than the amount sought in the tender. The consortium earlier did not agree to pay a $20 million performance guarantee that was part of the tender requirement.
The ministry also extended the project's timeline to 24 months from 18 months to facilitate building of the LNG terminal.
The Petrobangla is planning to establish a floating LNG import terminal with a capacity to handle 5 million tonne per year of LNG and a re-gasification capacity of at least 500,000 Mcf (1,000 cubic feet) per day at Moheshkhali Island in the Bay of Bengal.
It would have berthing and mooring facilities for LNG vessels with a capacity of 138,000-260,000 cubic meters, with Petrobangla looking to award the construction contract on a build-own-operate-transfer basis for 15 years.
Bangladesh has extended its memorandum of understanding with Qatar over import of LNG, which expired in March until June 2015, as it is confident it will be able to import LNG by then after completing the floating LNG terminal project.
Bangladesh signed the MoU with the Qatar Petroleum in January 2011 to import 4 million tonne LNG per year but is yet to get it as it has no receiving infrastructure.
Building the LNG import terminal is critical for the energy-starved south-eastern Chittagong region.
Chittagong, which was once almost self-reliant in natural gas, started facing a supply crisis in 2006 as output from the Sangu gas field fell, he said. Bangladesh's sole offshore gas well, Sangu-11, was permanently closed in October in 2013.