After a series of hiccups and delays, the much-talked about proposal to build a Liquefied Natural Gas (LNG) Terminal got its approval from The Cabinet Committee on Economic Affairs yesterday.
The nod came at the committee’s regular meeting with Finance Minister AMA Muhith in the chair after The Energy and Mineral Resources Division placed the proposal.
After the meeting, AMA Muhith told reporters that the government would import LNG from other countries at $16-17 per unit.
In November 2014, the committee returned the proposal to set up the country’s first Floating Storage and Re-gasification Unit (FSRU), popularly known as a Liquefied Natural Gas Terminal, for ambiguity on some points.
On June 26 last year, Petrobangla signed a term sheet with Singapore-based Astra Oil and Excelerate Energy Consortium (AE) under the Speedy Supply of Power and Energy (Special Provisions) (Amendment) Act 2014 to build the terminal.
According to the term sheet, Petrobangla will pay 0.474 cents per mmBtu (million British thermal units) for 15 years. The terminal will have an LNG storage capacity of 138,000 cubic metres.
Besides, Petrobangla will pay port service charges and taxes on behalf of AE during the period. Petrobangla will receive LNG within a range between 500 and 600mmcfd (million cubic feet per day.)
At present, the country’s gas production is about 2,350 mmcf per day against a demand of 3,000 mmcf.
The Awami League-led government during its previous tenure decided to import LNG to increase gas supply to the national grid by some 500 mmcfd from 2013.
Meanwhile, state-owned Gas Transmission Company Ltd has moved to install a 91km Maheshkhali-Anwara gas transmission pipeline to carry the re-gasified LNG from the terminal to the shore.