June 22, 2016 [The Daily Star] - Petrobangla will pay about $90 million a year to use the planned LNG terminal of US-based Excelerate Energy in Moheshkhali, as the government seeks to speed up the import of gas to meet growing demand.
The amount will be higher when taxes, value added taxes, insurance and other charges are included.
The power, energy and mineral resources ministry may place a proposal today on the use and implementation agreement of the liquefied natural gas terminal at the meeting of the cabinet committee on purchase.
In March this year, Petrobangla and Excelerate Energy signed an agreement to set up Bangladesh’s first LNG terminal, known as a floating storage and re-gasification unit, on the Moheshkhali Island in the Bay of Bengal to handle imported LNG.
The unit will supply gas to Chittagong that has been facing an acute gas crisis for a long time now.
Bangladesh now produces 2,700 million cubic feet of gas a day against a demand of 3,300 MMCFD.
As per conditions, Excelerate Energy has set up a separate company — Excelerate Energy Bangladesh Ltd — that will supply 500 MMCFD of gas for 15 years.
Under the deal, state-run Petrobangla would be able to use the floating storage and re-gasification unit as an LNG terminal and it will have to be handed back after 15 years without any charge.
Petrobangla will have to spend $1.56 billion a year to increase the supply of natural gas by 500 MMCFD. The state-run agency will mobilise funds by adjusting gas prices, said the proposal. The agreement is the government’s first step in alleviating the gas crisis in the long-run.
Excelerate Energy, the pioneer and market leader in innovative floating LNG solutions, would develop the terminal in 23 months.
A 90-kilometre pipeline with a 30-inch diameter will carry the gas from the floating terminal to Anwara to feed the national grid. The land for the terminal has been acquired and the environment clearance certificate obtained, according to the energy ministry proposal.
The LNG will be imported from Qatar, and an agreement has already been signed between the governments to this effect. The Qatar government has assigned RasGas Company Ltd, one of the world’s premier integrated LNG enterprises, to supply the LNG to Bangladesh.
The US energy firm has already carried out a met-ocean study and found the construction of the terminal viable. Excelerate Energy will get $159,186 a day as rent for the floating terminal, $45,814 a day as operational charge and $32,000 for port services. The government has fixed a target to add the LNG to the national grid by 2017 after establishing the LNG terminal.
It is being implemented as a fast-track project by the government.
