Deal for LNG terminal on Monday

Petrobangla is set to sign the final deal with Excelerate Energy Bangladesh Limited (EEBL) to build the country’s first liquefied natural gas (LNG) processing terminal on Monday. Under the agreement, the EEBL, a subsidiary of US-based Excelerate Energy, will build the floating storage and re-gasification unit (FSRU) – popularly known as LNG terminal – at Maheshkhali in Cox's Bazar on a build-own-operate-transfer basis. The EEBL will build the terminal within 18 months of signing the deal. The import of LNG may start in early 2018. Bangladesh Oil and Gas Corporation (Petrobangla) Chairman Ishtiaq Ahmad confirmed the matter to the Dhaka Tribune. The Cabinet Committee on Public Purchase on June 22 approved the proposal for setting up the LNG terminal to process the imported LNG into natural gas. Petrobangla will have to pay a total of $90 million as terminal charges excluding tax, VAT and insurance fee to the terminal operator to use its facilities. It will pay about $159,186 per day as fixed component of fees; $45,814 as operating component fees; and $32,000 to the terminal operator. The terminal operator on an average will charge $0.49 per unit of gas for regasification and processing of the imported LNG, Petrobangla officials said. The government has to spend about of $1.56b annually to import 182.5 billion cubic feet of LNG from abroad at an estimated cost of $8 per million British Thermal Unit (mBTU) – a measure of energy content in fuel. This means, Bangladesh has to spend about $2.5b annually to supply 500 mmcfd imported gas. Petrobangla took the initiative to install the LNG terminal six years ago considering the country’s ongoing gas crisis. The agreement with the EEBL will be signed under the Speedy Supply of Power and Energy (Special Provision) Act 2015. The EBBL already carried out a met-ocean study on June 22 last year via the Maritime Research Institute (MARIN), a reputed organisation from the Netherlands. Met-ocean study determines the physical environment near an offshore platform. The terminal’s LNG storage capacity will be 138,000 cubic metres, and it will receive a supply of 500-600 million cubic feet per day. The state-owned Gas Transmission Company Limited has also moved to lay a 91km gas transmission pipeline from Maheshkhali to Anwara to carry the re-gasified LNG to the mainland.