A number of twelve companies have submitted documents showing interest to build the country’s first onshore liquefied natural gas (LNG) import terminal, state owned Rupantarita Prakritik Gas Company Limited (RPGCL) officials said.
They said a committee will evaluate the proposals and create a shortlist based on the capabilities and technical assessments of the 12 companies. It could take more than a year to complete and award the contract for the terminal.
Bangladesh is turning to land-based LNG terminals as its first imports of the super-chilled fuel via a floating platform is being delayed due to inclement weather and technical issues.
The government will build a land-based LNG terminal with a capacity of 1,000 million cubic feet per day.
RPGCL General Manager (LNG) Mohammad Rafiqul Islam told Bangladesh Post, “Our target is to complete the construction of LNG terminal by 2023. Hope we can do it.”
RPGCL had requested expressions of interest (EOI) from potential terminal developers for a land-based LNG regasification terminal at Matarbari in Cox’s Bazar.
The 12 companies showing interest include Japan’s Mitsui, South Korean utility KOGAS, and a consortium led by Summit Corp, a unit of Bangladesh’s Summit Group, the officials said.
Mentionable, the consortium of Summit, Japan’s Mitsubishi and UK-based JERA Co, the world’s largest LNG buyer, was created for the proposed development of the LNG terminal in Matarbari. Summit is the lead investor in the consortium with Mitsubishi and JERA as minority stakeholders.
Sources said the expression of interest is for the design, engineering, procurement, construction and commissioning of an onshore terminal that can handle 7.5 million tonnes of LNG a year, including receiving, unloading, storing and regasification facilities.
The project will run on a build-own-operate basis for 20 years, with ownership to then be transferred at no cost to the Bangladeshi government or a company nominated by the government.
The aim of the terminal is to import LNG to face any sudden energy crisis because of supply shortfall in the near future. However, an energy expert said that the government should take up the LNG project carefully, as it is a costly fuel. Sources said, LNG carrying ships may anchor about 4 to 6 kilometers distance from land to sea area in Maheshkhali. On the other hand, the LNG ship should be kept at least 50 kilometers away in Payra. In that case, the construction of a subsea pipeline or sea dredging will have to bring the ship closer to the coast. As a result, the construction cost will be high. Currently, two FSRUs, owned by US-based Excelerate Energy and local Summit Group, are currently re-gasifying around 580 mmcfd of LNG. Both the FSRUs have the capacity to re-gasify around 1,000 mmcfd of LNG in total.
The FSRU arrived in April for commissioning at the port of Maheshkhali near the city of Cox’s Bazar, but its start-up was delayed for several months due to technical problems and bad weather. Prime Minister Sheikh Hasina has ordered to build permanent or land-based LNG terminal in this regard, sources said. Bangladesh is looking outside to alleviate its energy shortage, largely caused by depletion of domestic reserves and rising demand. The shortage of gas has affected power generation. The government aims to set up four land-based LNG terminals and one or two floating storage and regasification units. Over half a dozen local and international companies have been expressing interest to set up LNG-based power plants in the country having combined capacity to generate 13,083 MW electricity under unsolicited deals, the official confirmed.