The government has approved in principle the establishment of a third floating liquefied natural gas terminal in Cox's Bazar.
The Cabinet Committee on Economic Affairs on Wednesday approved state-run oil company Petrobangla's proposal to task Summit with setting up the terminal with a capacity to regasify 600 MMcf/d of imported LNG at Moheshkhali.
The meeting was held on Wednesday under the chairmanship of Finance Minister AHM Mustafa Kamal. After the meeting, Additional Secretary of the Cabinet Division Syed Mahbub Khan briefed the media.
He told reporters that the proposal of Summit Oil and Shipping Company Limited to set up a third floating LNG terminal with a capacity of 600 mmcf per day at Maheshkhali in Cox's Bazar was approved by Petrobangla under the Department of Energy and Mineral Resources.
There are currently two LNG terminals in the country. USA’s Accelerate Energy and Summit Group built these two terminals with a capacity of 500 million cubic feet per day at Moheshkhali.
Accelerate Energy signed an agreement with Petrobangla on July 18, 2016 to build a floating LNG terminal at Maheshkhali. After the construction, the company started supplying gas on August 19, 2018. The terminal has a 15-year gas supply contract till 2032. However, the term of this contract has been extended till 2038.
On April 20, 2017, the local energy sector company Summit Group signed an agreement to build a floating LNG terminal in Moheshkhali based on the same technology. Then the company started supplying gas on April 30, 2019. The term of this terminal is till 2033.
Meanwhile, the supply of two floating LNG terminals was temporarily stopped due to the impact of cyclone Mokha. However, at the end of last month, the two terminals started supplying gas at full capacity. The total supply capacity of these two floating LNG terminals installed on the Moheshkhali coast of Cox's Bazar is 1,000 (500+500) MMcfd.
According to the international energy research institute ‘Institute for Energy Economics and Financial Analysis’ (IEEFA), Bangladesh is at the lowest position in Asia in the use of LNG infrastructure due to high prices.
The company has released a third quarter 2022 LNG infrastructure utilization figure from UK-based information services firm IHS Markit. There, China, India, Pakistan and Bangladesh LNG terminal usage in 2021 and 2022 is presented. It showed that Bangladesh could not use 50 percent of LNG terminal capacity in 2022 compared to 2021.
Meanwhile, the committee also approved plans to import a cargo of LNG from Excelerate Energy through an open tender, according to Khan. This is set to cost Tk 5.7 billion in total, with the price of each unit being $13.9.
During the meeting, a long-term agreement to purchase fertilisers from the United Arab Emirates, Saudi Arabia and Qatar on a G2G basis was also approved.