Bangladesh Power Development Board (PDB) is set to sign a deal with Reliance Power Ltd to purchase power from the 718MW liquefied natural gas (LNG)-based power plant in Meghnaghat, Narayanganj that the Indian power giant is setting up.
“We will sign a power purchase deal with Reliance very soon to purchase electricity to be generated from the LNG plant [in Meghnaghat],” said a PDB chief engineer on Wednesday, requesting anonymity.
Reliance accepted PDB's letter of intent regarding the deal on August 24, 2017, he told the Dhaka Tribune.
“After the decisions are finalised, the proposal will be sent to the Ministry of Law for vetting. The contract will be signed after the ministry approves it,” he added.
The Meghnaghat power plant, located 24km south of Dhaka, is the first ever power plant in the country that will be run by regasified LNG.
The power plant is expected to be commissioned by mid-June in 2020.
The PDB official said the power plant was going to boost the economic and industrial growth of the country as well as help to enhance energy security.
It has yet to be decided whether Petrobangla, the lone authority in Bangladesh to supply gas, or Reliance itself will import the LNG for the power plant.
If Reliance ends up importing the LNG, it will have to build a new floating storage and regasification unit (FSRU) at Moheshkhali in Cox's Bazar, the official said.
Furthermore, state-run Gas Transmission Company Ltd (GTCL), which is responsible for installing gas transmission lines in the country, will be required to build a pipeline to supply regasified LNG to Meghnaghat from Moheshkhali.
Reliance will have to pay a “wheeling charge” to the GTCL for using the pipeline, the PDB official said.
Reliance first proposed to build the power plant in October 2014. On May 24 this year, the Cabinet Committee on Public Purchase gave the go-ahead to Reliance to set-up the power plant, with power generation capacity of 718MW.
The power plant will run on imported and regasified LNG. Once it starts production, the Bangladesh government will purchase electricity from Reliance for 22 years at Tk5.85 or $0.73 per unit.
Meanwhile, state-owned North-West Power Generation Co Ltd is planning to construct a 750MW-850MW regasified LNG-based power plant in Khulna.