The signing of final deal on construction of the country’s first LNG (liquefied natural gas) import terminal with Excelerate Energy now awaits nod from the cabinet committee on public purchase, Petrobangla sources said.
“We’ve sent the proposal of inking final construction deal of the LNG terminal to the purchase committee,” Petrobangla chairman Istiaque Ahmad told on Thursday.
He said the final deal will be inked between Excelerate Energy Bangladesh Ltd and Petrobangla after the purchase committee’s nod.
Construction of the LNG import terminal is important, as Finance Minister A M A Muhith in his budget proposal for the upcoming fiscal year (FY), 2016-17, made a commitment on behalf of the government to give gas connections to various industries from 2018 onwards.
“Taking the fact of LNG import into consideration, the government is making commitment to give gas connections to various industries from 2018 onwards,” he said.
Natural gas connection to industries is currently under strain due to scarcity of production.
The country’s overall natural gas production is currently around 2,700 million cubic feet per day (mmcfd) against the demand for around 3,300 mmcfd, according to Petrobangla.
To cope with the gas supply shortfall, the government started gas rationing in industries, power plants and fertiliser factories since 2009.
Petrobangla chairman, however, said Excelerate Energy has started its work and currently carrying out geophysical work at the project site as part of the terminal construction work.
Excelerate and state-run Petrobangla on March 31 initiated the deal on the LNG terminal use over building the FSRU (floating, storage and re-gasification unit).
Excelerate has been selected to build the FSRU under build, own, operate and transfer (BOOT) basis and will charge US$ 0.49 per Mcf (1,000 cubic feet) against its service.
Petrobangla will have to count an additional $ 0.10 per Mcf to cover other related costs, which include the costs for fuel, tugboat operation, and port facility etc, said a Petrobangla official.
Re-gasified LNG from the terminal will be sold on a take-or-pay basis to Petrobangla, which will have back-to-back gas sales agreements with power plant owners or operators and other consumers at the user end.
The FSRU will have berthing and mooring facilities for LNG tankers with a capacity of 138,000 cubic meters.
It will have the capacity to supply around 500 mmcfd of natural gas to the country’s national gas grid, which can be increased to around 700 mmcfd.
The tenure of the construction contract will be for 15 years.