Bangladesh receives 1st delivery of imported LNG, supply expected mid-May

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Bangladesh receives 1st delivery of imported LNG, supply expected mid-May

The maiden consignment of liquefied natural gas (LNG) reached Moheshkhali from Qatar to supply imported gas to the national network.

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

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

“The FSRU reached the country at 2pm today (Tuesday), one day ahead of its scheduled arrival,” said Mohammad Quamruzzaman, managing director of Rupantarita Prakritik Gas Company Limited (RPGCL).

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

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

Quamruzzaman said now it will take three to four weeks to complete some technical work to commission the FSRU for supplying the imported gas to the national network.

“We hope, we will be able to commission the FSRU by mid May”, he said, adding the next consignment is expected in the middle of June on a separate LNG vessel.

The imported LNG will be re-gasified by private FSRUs.

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

“The FSRU, owned by US-based Excelerate Energy Bangladesh Ltd, carried 133,000 cubic meters (CM) of lean LNG to supply to consumers,” said the RPGCL chief.

Deliveries from Qatar are part of a sales and purchase agreement with RusGas for 2.5 million tons per year of LNG, priced at 12.5% of the three-month average of Brent, plus an additional $ 0.5 per unit (1 MMBTU).

On April 19 last week, Bangladesh’s cabinet committee approved a final sales and purchase agreement, or SPA, with Oman Trading International, or OTI, to import around 1 million ton per year of LNG for 10 years.

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

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

Bangladesh’s second LNG import terminal, a 3.75 million tons 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 experts believe the imported LNG will push up gas prices at the consumer end as imports will drive up the overall cost of gas.

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

Nafees Imtiaz Islam
Deputy Director
Research Centre (Office of the Chairman, BoTs, DIU) and Institutional Quality Assurance Cell (IQAC)
​​Daffodil International University (DIU)
​​Telephone: 9138234-5 (Ext.: 387)