Power purchase deal with India’s Reliance Sept 1

Bangladesh Power Development Board (BPDB) is set to sign a power purchase agreement with Indian Reliance Power Ltd to purchase power from the proposed 750MW liquefied natural gas (LNG)-based power plant at Meghnaghat in Narayanganj.

After a number of changes in its proposal, an official of Bangladesh Power Development Board (BPDB) said the Indian conglomerate has finally agreed to set up a 750MW gas-fired power plant in Meghnaghat near Narayanganj instead of 3,000 MW plant. The government has agreed to supply gas to run the power plant.

"Reliance has changed its proposal four times," Sources in the BPDB said.
Earlier, it was said that the plant would be run on 110 million cubic feet per day of regasified LNG arranged by Reliance. For that reason, the Indian company was supposed to build a 3.75 million tonne per year-capacity FSRU-based LNG terminal near the port city of Chattogram. Now Petrobangla      will supply the gas.

"We are set to sign the deal on September 1.Our part is to look into the plant and electricity production issue. We do not deal with the fuel issue," BPDB Chairman khaled Mahmood told the Daily Observer on Wednesday.
Power Division officials said Reliance signed the MoU during Indian Prime Minister Norendra Modi's Dhaka visit in early June 2015, announcing its plan to set up a 3000MW gas-fired power plant and a 500 mmcfd LNG terminal in Bangladesh.

The BPDB is expected to purchase electricity from the Reliance plant for 22 years at a levelised tariff rate of 7.31 cents per kilowatt-hour (kWh).
The final deal with Indian Reliance Group is finally going to be signed for its proposed LNG-based 750 MW power plant as the Power Division has recently received clearance from the ministries of Law and Finance for the agreement, official sources said.

"About four years back, the Indian Reliance Group signed a Memorandum of Understanding (MoU) for making an investment worth $3 billion in power and energy sector of Bangladesh. It was said that Relinace will install a FSRU near Moheshkhali, the state-owned Gas Transmission Company Ltd (GTCL) will install a gas pipeline from Moheshkhali to Bakhrabad and supply into the national grid as the Meghnaghat area is an industrial hub where gas crisis is a regular issue," a power Division Official said.

The import of liquefied natural gas (LNG), use of the required gas at the power plant and also selling of the remaining portion of the imported gas to Bangladesh government were all parts of Reliance's initial plan.
"But, frequent changes in its proposal and mismatch with the government's terms and conditions has put the Reliance in back foot in pushing forward its project in Bangladesh," said a top official at the Power and Energy Ministry.
According to the Power Division, the BPDB allowed Reliance to manage gas from its own account as the industrial hub in the Meghnaghat area faced serious gas crisis previously.

"The Ministry of Law and the National Board of Revenue (NBR) raised some issues over the insurance of the project while vetting. But finally it gets the government nod," a senior official said.
"Now reliance said there is no gas crisis in Bangladesh as it is importing LNG,," the official added.

The government will have to spend a total of Tk 80,945 crore (about $8 billion) over the 22-year period for buying electricity from the plant, the officials added.

The government has scrapped talks with Reliance Power Ltd to build a new floating, storage, regasification unit (FSRU) for LNG imports at Kutubdia Island also.