Summit to set up third floating LNG terminal
Summit Group is set to establish the country's third floating storage and regasification unit (FSRU) in Maheshkhali of Cox's Bazar, a development that will increase the country's capacity to process imported liquefied natural gas by as much as 60 percent.
LNG that arrives from abroad needs to be converted back to the gaseous state to be used as fuel, power generation, heating, cooking etc. That can be done at FSRUs, which are multi-function vessels that combine LNG storage and built-in regasification systems onboard a ship or barge.
At present, there are two FSRUs that have the capacity each to regasify about 500 million cubic feet of gas (mmcf) a day. This is not enough to meet the country's daily demand for gas of about 4,000mmcfd.
As much as 3,000mmcf gas is being supplied a day, with about 750-850mmcf coming from the two existing FSRUs, according to Petrobangla data. The rest comes from the local gas fields.
Subsequently, a proposal was sent by the ministry of power, energy and mineral resources to build a third FSRU, which was approved yesterday by the cabinet committee on economic affairs.
The approval was taken under the controversial Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010, which was amended in 2021, according to the meeting minutes.
The new terminal, which would be Summit's second FSRU, will have the capacity to regasify 600 mmcf of gas a day.
In 2026, the demand for gas will increase further and the government has no option but to import more LNG, said two Petrobangla officials.
The new FSRU would be needed to process the additional LNG coming in, they said, citing the LNG deal signed with Qatar recently to further their point. A similar deal will be signed with Oman soon.
However, experts questioned the rationale of entering into long-term LNG deals without exploring more local gas. The rising dependence on expensive imported gas may hit the economy in future.
The energy division should give priority to gas exploration, said Badrul Imam, honorary professor of Dhaka University's Geology Department.
"The dependence on gas imports will not ensure energy security," he added.
The country started importing LNG in late 2018. Since then, the country has imported 283 LNG cargoes from Qatar and Oman under two long-term contracts and 37 cargoes from the international spot market.
Yesterday's meeting also approved a proposal for procuring 33.6 lakh MMbtu of LNG at a cost of Tk 574.65 crore from the US's Excelerate Energy LP. The per unit cost will be $13.9.