Bangladesh set to ink LNG deal with Qatar

The two sides will discuss issues regarding the quantity of liquefied natural gas (LNG) to be imported from Qatar and its pricing

Petrobangla had signed a Memorandum of Understanding (MoU) with Qatar in January 2011 to import around 4mn tonnes of LNG annually.
Petrobangla had signed a Memorandum of Understanding (MoU) with Qatar in January 2011 to import around 4mn tonnes of LNG annually.

A high-level government team is set to leave from Bangladesh to Qatar this month to initiate a deal with Qatar's RasGas to import LNG six years after inking a Memorandum of Understanding, a senior official said in Dhaka according to Gulf Times.

The team will discuss issues regarding the quantity of liquefied natural gas (LNG) to be imported from Qatar and its pricing, LNG Cell chief of state-run Petrobangla Mohamed Quamruzzaman told reporters.

Petrobangla had signed a Memorandum of Understanding (MoU) with Qatar in January 2011 to import around 4mn tonnes of LNG annually.

It twice extended the deadline of the MoU due to delay in works to build LNG import terminal.

Petrobangla inked a "confidentiality" deal with RasGas in Doha in October 2015 to facilitate import of LNG.

Inking the initial agreement would be a follow-up deal after the signing of the 'confidentiality' deal, the Petrobangla official said.
Officials said, Petrobangla has now been 'liberal' to award deals to private sector for building LNG terminals under Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010 bypassing competitive tendering process.

Petrobangla, also known as Bangladesh Oil, Gas and Mineral Corporation, signed the first final deal with US-based Excelerate Energy Bangladesh Ltd for construction of the South Asian country's first LNG terminal - a FSRU (floating, storage and re-gasification unit) - at Moheshkhali island in the Bay of Bengal on July 18, 2016.

Excelerate is now working to implement the project having the LNG import handling capacity of up to 700mn cu ft per day (mmcfd), Quamruzzaman said.

It later inked a MoU on December 29, 2016 with India's Petronet to build another LNG import terminal at Kutubdia island having a capacity to handle around 1,000 mmcfd of imported LNG.

Petrobangla again initiated a deal with Summit LNG Terminal Company Pvt Ltd on January 4 to build another FSRU at Moheshkhali island having the capacity to handle around 500 mmcfd of gas.

It has now moved to sign a deal with India's Reliance to build another LNG terminal at Moheshkhali island, the senior Petrobangla official said.

State-run Power Cell has also planned separately to build a LNG terminal in the same area at Moheshkhali, officials said.

Under the deals, Petrobangla would have to pay charges and fees to the LNG terminal builders even if it does not import LNG through the terminals, Petrobangla sources said.

Excelerate would charge around $0.59 per unit (1,000 cubic feet) of natural gas as service charge and costs for tag boat operation, port facility, etc.

Costs for Petronet, Summit and Reliance are almost similar to that of Excelerate.

Petrobangla has estimated that the government would have to spend around $1.57bn annually to import LNG only through the terminal to be built by Excelerate at an estimated cost for LNG at $8 per Mcf.

Bangladesh is now reeling under natural gas shortage with daily average output of around 2,700 mmcfd of gas against the demand for over 3,300 mmcfd, according to Petrobangla.

The country started facing natural gas crisis in 2009 with rapid industrialisation forcing Petrobangla to ration supplies to gas-guzzling industries, power plants, CNG (compressed natural gas) filling stations and households.

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