Under the agreement, the EEBL, a subsidiary of US-based Excelerate Energy, will build the country’s first floating storage and re-gasification unit (FSRU) – popularly known as LNG terminal – to process imported LNG into natural gas on a build-own-operate-transfer basis.
Syed Ashfaquzzaman, secretary of Petrobangla, and Karlman Tham, business development manager Excelerate Energy in Asia, signed the agreement on behalf of their respective organisations at Petro Centre in the city yesterday.
Petrobangla took the initiative to install the LNG terminal six years ago considering the country’s ongoing gas crisis.
In line with that initiative, it has now signed the agreement with the EEBL under the Speedy Supply of Power and Energy (Special Provision) Act 2015 to set up the terminal at Maheshkhali Island in the Bay of Bengal.
After receiving approval from the Cabinet Committee on Economic Affairs on the project, Petrobangla will sign the final agreement with the EEBL for 15 years.
During the signing ceremony, Prime Minister’s Energy Adviser Tawfiq-e-Elahi Chowdhury said once fully operational, the FSRU will initially supply 500 mmcfd – million cubic feet per day – which will increase to 1,000 mmcfd in two years.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid said the government was determined to maintain an uninterrupted supply of gas for all.
Nazim Uddin Chowdhury, secretary at the Energy and Mineral Resources Division, and Ishtiaq Ahmed, chairman of Petrobangla, were also present on the occasion.
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.
Petrobangla Chairman Ishtiaq Ahmad said the EEBL submitted the draft terminal use agreement based on the findings of that study.
Later, that agreement was finalised with the help of local and international lawyers and foreign technical consultants.
Now that the terminal use agreement has been ratified, the EEBL will conduct the geophysical study within the next two months, to determine the composition of Earth’s interior under the ocean in the area.
The EEBL will also carry out a geotechnical study and detailed engineering design before starting the construction of the terminal.
It will build the terminal within 16 months of signing the final deal. The import of LNG may start in early 2018.
Petrobangla will pay 0.59 cents per million British Thermal Unit (mBTU) – a measure of energy content in fuel – to use the terminal.
Petrobangla will also pay the port service charges and taxes on behalf of the EEBL throughout the duration of the contract.
Furthermore, the Bangladesh government will have to buy the LNG, which will be imported from Qatar and other countries.
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 Maheshkhali-Anwara gas transmission pipeline to carry the re-gasified LNG from the terminal to the mainland.
At present, the country’s gas production is about 2,700 mmcfd against a demand of 3,300 mmcfd.