Singapore-based Astra Oil and Excelerate Energy Consortium will realise about three time than its investment as the government would pay it $1,352.4 million in 15 years against its investment of about $500 million for processing imported LNG into natural gas.
The data was revealed on Thursday evening when Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, and the Astra-Excelerate consortium endorsed the Term Sheet of a contract to set up a floating terminal and process plant at Moheshkhali in Cox’s Bazar to re-gasify imported Liquefied Natural Gas.
The sides would sign the final deal under the Power and Energy (Special Provision) (Amendment) Act 2012 by December 2014.
Petrobangla will pay the consortium $90.16 million a year to process the imported LNG for 15 years, according to a handout provided by Petrobangla.
In other words, Astra-Excelerate will realise $0.474 for processing 1,000 cubic feet of natural gas.
When asked, Petrobangla chairman Hossain Monsur said that Astra-Excelerate would invest about half a billion US dollar or $500 million for the project.
The government plans to increase gas supply by 500 million cubic feet per day from imported liquefied natural gas.
In 2011, Petrobangla initiated the process for awarding the contract by short listing four out of 10 international firms. In the same year, the government signed a memorandum of understanding to import LNG from Bahrain.
Monsur said that the Astra-Excelerate would complete the authority would begin gas supply from the imported LNG from the Moheshkhali terminal from June 2016.
Prime minister’s energy adviser Tawfiq-E-Elahi Chowdhury, state minister for power, energy and mineral resources Nasrul Hamid, energy division secretary Md Mozammel Haque Khan and Astra-Excelerate consortium’s representative Sampo Suvisaari addressed the programme.
At the programme, Nasrul that the government would increase the price of natural at the consumer end.
The government would also revise the allocation of gas to the priority sector as the cost of gas was increasing, he said.
The government’s decision of importing expensive liquefied natural gas or LNG to increase the supply of natural gas would raise the average cost of gas significantly as the gas in the form of LNG would cost about $16 per thousand cubic feet while it currently spends about $2 for indigenous gas, officials said.
Monsur told New Age that the imported LNG would be less expensive and less environment hazardous fuel for power generation than imported furnace oil.
The government had no other way but to explore the expensive option to feed the gas-based system as the existing reserve of natural gas was running out and the exploration activities has failed to add to the reserve, officials said.