BD gets 1st delivery of imported LNG, supply expected from mid-May

Experts anticipate country’s overall energy cost to go up

24 Apr 2018, 21:06

NTV Online
Photo: Collected

Dhaka: The maiden consignment of LNG reached Maheshkhali fromQatarto supply the imported gas to the national network.

According to official sources, the very first consignment of liquefied natural gas (LNG) reached Chittagong through the Excelerate Energy’s floating storage and re-gasification unit (FSRU).

The FSRU is generally known as LNG terminal which was set up on a floating vessel with storage and re-gasification facilities, will permanently station in Maheshkhali.

‘The FSRU reached the country at2 pm Tuesday, one day ahead of its scheduled arrival’, Mohammad Quamruzzaman, managing director of Rupantarita Prakritik Gas Company Limited (RPGCL), reports the UNB.

RPGCL, a subsidiary of the state-owned Petrobangla, has been responsible for import of LNG and supply the gas to the national network through re-gasification process.

The import of LNG was initiated more than seven years ago. But with the arrival of first consignment, the government achieved the success in its effort of LNG import to meet the gas shortage.

Quamruzzaman informed that now it will take 3-4 weeks to complete some technical works to commissioning the FSRU for supply of the imported gas to the national network.

‘We hope, we could be able to commission the FSRU in mid of May’, he said adding the next consignment is expected in mid of June with separate LNG vessel.

Before the supply to the national network, the imported LNG will have to be re-gasified through the FSRU, installed by Excelerate Energy, a US-based private operator.

Bangladeshsigned a contract withQatar’s state-owned RusGas to import LNG while process is underway to sign more deals for the same purpose.

After the import the LNG will be re-gasified through the private FSRUs.

So far local Summit Group and US-based Excelerate Energy are allowed to set up two separate FSRUs near Moheshkhali island to store the imported LNG and then supply it to national grid through re-gasification process.

‘The FSRU, owned by US-based Excelerate Energy Bangladesh Ltd, carried 133,000 cubic meter, or cm, of lean LNG to supply to consumers,’ said the RPGCL chief.

Deliveries fromQatarare part of a sales and purchase agreement with RasGas for 2.5 million tonne per year of LNG, priced at 12.5 per cent of the three-month average of Brent plus an additional US$ 0.5 per unit (1 MMBTU).

Bangladesh’s cabinet committee on April 19 approved inking a final sales and purchase agreement, or SPA, with Oman Trading International, or OTI, to import around 1.0 million tonne per year of LNG for 10 years last week.

The country is also in negotiations with other suppliers and is planning to sign binding LNG SPAs for more than 3 million tonne per year shortly.

The FSRU, which belongs to US-based Excelerate, has a capacity of 3.75 million mt of LNG, and will be moored at Moheshkhali island, near the Chattagram port.

Bangladesh’s second LNG import terminal, a 3.75 million tonne per year FSRU, being developed by the local Summit Group, is expected to be commissioned in October.

The country is in negotiations with four other suppliers for long-term deals and is also eyeing short-term and spot purchases.

Many consumers and energy expert believe the imported LNG will push up gas price at the consumers’ end as it import will escalate the overall cost of gas supply.

They said with the start of LNG import, the country’s overall energy cost will go up, even to a level of double diminishing the existing business competitiveness if there is no specific plan for utilising the imported gas for any specific sector.