State-owned Petrobangla is yet to receive clearance from ministries concerned to sign its final deal with a Singapore-based US company to build a floating LNG (liquefied natural gas) terminal in Cox's Bazar, reports UNB.
Industry insiders fear that it may delay the implementation process of the important energy infrastructure even though the government attaches top priority to it.
Officials said the draft deal was inked between Petrobangla and the US firm -- Astra Oil & Excelerate Energy Consortium -- on June 26 this year to set up the floating storage and re-gasification unit (FSRU)-based LNG terminal by 2016 at a location, 5-10 kilometres off Maheshkhali island in Cox's Bazar.
After a long negotiation process, the sources said, both the parties initiated a 'term sheet' for the project. Prior to moving for the project, the government, however, signed a memorandum of understanding (MoU) with Qatar four years ago to import LNG.
At the draft deal signing ceremony, State Minister for Power, Energy and Mineral Resources Nasrul Hamid, MP, had said the LNG terminal would be operational by June 2016 if everything went well.
He also said the government had moved to set up the LNG terminal as part of its vision to turn Bangladesh into a middle-income country.
Officials at Petrobangla said immediately after the signing of the draft deal, they put it forward to the ministry of power, energy and mineral resources (MoPEMR) for necessary clearance from the ministries of law and finance and also for the approval from the cabinet purchase body.
The official sources said Petrobangla has not yet got back the relevant file though two months have passed by.
According to the sources, it is only the MoPEMR that has cleared the file and then sent it to the law ministry for its vetting.
When contacted, Petrobangla Chairman Dr Hussain Monsur told the news agency that his organisation has nothing to do but to wait unless it receives the clearance and vetting from the authorities concerned.
He, however, admitted that the Astra Oil & Excelerate Energy Consortium has been in constant touch with Petrobangla to know about the progress of the vetting to sign the final deal.
Once the final deal is signed, Dr Monsur said, the US firm will move to construct the terminal with a target to complete the project within 16 months. Prior to constructing the terminal, it will conduct a feasibility study for determining the site of the project on the basis of environmental aspects.
The Astra Oil & Excelerate Energy Consortium will operate the project for 15 years and it will charge US$ 0.41 per mmbtu (British thermal unit) gas for regasification of the imported LNG. With other charges, the cost will, however, go up to $ 0.47 per mmbtu.
The FSRU terminal will have a storage capacity of 138,000-square metre LNG. The project will supply 500 mmcfd (million cubic feet per day) of gas to the national gas transmission network to boost gas production.
At present, the country's daily gas production is about 2350 mmcf against a demand of 2700 mmcf.
Dr Hussain Monsur said the Astra Oil & Excelerate Energy Consortium will invest about $ 500 million for the project.
