LNG to be imported from Qatar's RasGas

The government is set to import liquefied natural gas from Qatar's state-owned RasGas for processing at the LNG terminals that are being set up.

The proposal was approved yesterday by the cabinet committee on economic affairs.

The government has been considering setting up several LNG terminals in the country for importing gas, and an agreement has already been signed with US-based Excelerate Energy.

The terminal will be set up at Moheshkhali in the Bay of Bengal and will handle imported LNG 500 million cubic feet per day and supply it to the national grid from early 2018.

For supplying  500 MMCF gas daily, an estimated 3.75 tonnes of LNG would have to be imported a year, according to the proposal from the energy ministry.

The rate at which gas would be supplied by RasGas has not been fixed yet.

As per their estimate from a year ago, the purchase rate of LNG will be $8 for one million British thermal units or MMBTU. Accordingly, Bangladesh will have to spend about $1.85 billion every year.

However, the imported gas will be mixed with local gas and the price of per unit mixed gas would be $4.35/MMBTU.

Bangladesh is looking outside to alleviate its energy shortage largely caused by the depletion of domestic reserves and rising demand.

Gas supply stands at about 2,700 MMCFD against the demand for 3,300 MMCFD.

The shortage of gas has affected power generation as well as industries and households. The government aims to set up four land-based LNG terminals and one or two floating storage and re-gasification units.

The demand for gas will stand at 8,000 MMCFD in 2041, according to an estimate of the Energy Division.

The government has already received proposals from 14 companies for setting up LNG terminals.

China Huanqiu Contracting & Engineering Corporation has proposed to set up an LNG plant in Moheshkhali, while KOGAS-MGCB-KSBL Consortium wants to set up a land-based terminal in Sonadia.

Besides, Singapore's Sembcorp Utilities Pte Ltd submitted a proposal for setting up a Gravifloat terminal and storage tank in the deep sea.

The Gravifloat technology allows the LNG terminal to be fully built and completed at a shipyard and installed in shallow waters to facilitate direct ship loading of LNG.

In December, Petrobangla signed an initial agreement with India's energy company Petronet to set up an LNG re-gasification terminal on Kutubdia Island and a pipeline at an estimated cost of $950 million.

The cabinet committee on economic affairs yesterday approved another floating LNG terminal to be set up on Moheshkhali Island in Cox's Bazar by Summit Group.

Summit Group signed an initial contract with Petrobangla on January 3. 

Under the proposal, Summit LNG Terminal Company, a unit of Summit Group, will develop the floating facilities within 18 months of signing the final contract.

The LNG terminal company will supply 500 million cubic feet of gas per day, for which the government will pay a total of $1.56 billion in a year.

The terminal, which will cost Summit $500 million, will be set up on a build-own-operate and transfer basis. The tenure of the agreement will be 15 years.

State-run Petrobangla will pay $158,511 per day to Summit as fixed component fees, $30,500 daily as operating component fees and $30,500 for port service component fees.

Summit LNG Terminal Co will pay $20 million as performance bond to Petrobangla within 15 days of signing the agreement, according to the proposal.