Floating LNG Terminal In Moheshkhali
Petrobangla to sign deal with Summit today
Petrobangla, the state- owned oil and gas corporation, will sign a contract with local conglomerate Summit Group today (Thursday) for Terminal Use Agreement (TUA) to set up a floating storage and re-gasification unit (FSRU) in Moheshkhali, Cox's Bazar.
As per initial signed in January 3 this year, Summit LNG Terminal Company, a unit of Summit Group, will develop the floating facilities in 18 months under Build-Own-Operate-Transfer (BOOT) basis.
The terminal is estimated to facilitate a maximum supply of 500 million cubic feet of natural gas per day from imported LNG. Summit Group will transfer the facilities to Petrobangla after 15 years of operation of those at a cost of in between US$400m-$500m for implementing the project.
However, the floating terminal will help Summit implement a large gas-based power plant, having a capacity of generating 600 megawatts of electricity.
The government will be able to save at least $20m for using the Summit's liquefied natural gas (LNG) platform to reduce cost on feasibility study and margin of interest for setting up the terminal by the local firm.
This is the third LNG-related agreement the government has signed so far. In December, Petrobangla signed an initial agreement with India's energy company Petronet to set up an LNG re-gasification terminal on Kutubdia Island and a pipeline at an estimated cost of $950 million.
In July, the state-run corporation and US-based Excelerate Energy signed the final deals to set up Bangladesh's first LNG terminal, which will handle imported LNG and supply it to the national grid from early 2018.
According to the signed agreement, per unit processing cost will be 0.45 cent which is lowered compared to that of the under construction LNG terminal signed between Petrobangla and US company Accelerator Energy (AE) Bangladesh Limited. However, Accelerator asked 0.47 for per unit LNG processing cost.
The FSRU will be able to process up to 3.5 million tonnes a year (mta) of LNG. It will use a submerged turret loading buoy for mooring and transferring the re-gasified cargo to shore.
Summit Group in collaboration with GE is keen to implement an LNG terminal with 500mmcfd re-gasification capacity along with setting up of 1,650MW power generation facility at commercially competitive price.
"Summit LNG Terminal Company is going to sign two agreements with Petrobangla and Energy and Mineral Resources Division (EMRD) for Terminal Use Agreement (TUA) and Implementation Agreement (IA) respectively for the Floating Storage and Regasification Unit (FSRU) with delivery at Gas Transmission Company Limited (GTCL) in Moheshkhali, Cox's Bazar," a statement said.
Earlier, the company submitted a proposal for setting up series of LNG-fired power plants having combined capacity to generate 1,650MW of electricity. The proposal got approval from the Prime Minister's Office to set up a floating terminal along with power plants under a joint venture with US-based General Electric (GE).
According to Summit, the LNG project can bring down per kilowatt cost of Summit Meghnaghat Power.
"Bangladesh Power Development Board (BPDB) is operating Summit Meghnaghat Power facility with imported fuel at Tk 18.23 per kwh (per unit). The plant can be operated with LNG which can bring down per kilowatt cost to about Tk 8.88, thus saving about Tk 7.497 million for BPDB every year", the official said.
Bangladesh is looking outside to ease its energy shortage largely caused by depleting domestic reserves and rising demand. Gas supply stands at around 2,700 MMCFD against the demand for 3,300 MMCFD.
The government aims to set up four land-based LNG terminals and one or two floating storage and re-gasification units.
Summit Corporation Limited, with its four listed companies, has a combined electricity generation capacity of 1460MW at present with net investment of $470 million.