“This marks the end of paperwork. We expect to start supplying gas by the end of 2017,” said Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister, after two separate agreements were signed to set up the LNG terminal at Moheshkhali in the Bay of Bengal.

Known as Moheshkhali Floating LNG Terminal, the scheme was taken in 2010. The terminal is now one of the fast-track projects that the government took to strengthen infrastructure.

“This is a very critical project for us. A lot of people are waiting for gas to run their factories,” Chowdhury said.

The LNG terminal, also called floating storage and re-gasification unit, will have the capacity to supply 500 million cubic feet (MMCF) of gas per day.

Petrobangla will have to spend $1.56 billion a year to import the LNG from Qatar. In March this year, Petrobangla and Excelerate inked an initial agreement to set up the terminal. The unit will supply gas to Chittagong region that has been suffering from an acute gas crisis for a long time. Bangladesh now produces 2,700 MMCF of gas a day against the demand for 3,300 MMCF.

Insiders said gas prices may go up once the supply of imported LNG starts. Chowdhury suggested users, particularly industrial units, should increase energy efficiency.

State Minister for Power and Energy Nasrul Hamid said the government plans to set up four land-based LNG terminals and one or two floating storage and re-gasification units. An additional 3,500 MMCF of gas will be required in the coming years, especially for power generation and industrial purposes, he said.

Zanendra Nath Sarker, deputy secretary of the Energy and Mineral Resources Division, and Daniel Bustos, chief development officer of Excelerate Energy Bangladesh, signed the contracts. Marcia Bernicat, US ambassador to Bangladesh, was also present.