Petrobangla mulls long-term accord with Indian cos

Petrobangla, the state-owned oil and gas corporation, is considering signing a long-term deal with Indian companies to import Re-gasified Liquefied Natural Gas (RLNG) without carry out any feasibility study.
According to sources in the Energy Division, Petrobangla had inked two memorandum of understandings (MoUs) with Indian companies including Mumbai-based Hiranandani Energy (H-Energy) and Indian Oil Corporation Ltd (IOCL) for long-term import of RLNG from India through a cross-border natural gas pipeline.
On April 8 of 2017, Petrobangla and Indian Oil signed a MoU for supplying RLNG through the cross-border pipeline. Later, in a letter to Petrobangla, the Indian Oil said it was constructing a land-based terminal and allied infrastructure to this end.
The Indian Oil informed Petrobangla that work on the proposed LNG terminal was progressing as per the schedule and it was expected to be commissioned by mid-2022. Indian Oil confirmed to Petrobangla that they were in a position to supply one million tonnes of RLNG in the first year, and up to three million tonnes or as required by Petrobangla in
the subsequent years.
According to the proposals H-Energy will build and operate Kanai Chatta-Shrirampur natural gas pipeline, which will connect H-Energy's LNG terminal in West Bengal to Bangladesh through various regions of the state for enabling cross-border supply of RLNG.
A 60 Km long pipeline will be build from Haldia-Satkhira-(ArrangGhata)-khulna for taking the IOCL's RLNG.
"The question is whether it will required to import more LNG from abroad, do we need it or the market is ready to pay for it, we need to review the issue first and at the same time to assess our demand in true sense, when about 2000mmcfd capacity FSRU will be in operation by 2026-2027 for LNG import in the country." a senior official of Petrobangla told the Daily Observer on Sunday.
The country is importing around 750-800mmcfd LNG from two FSRUs having total 1000mmcfd capacity is in operation, another 1000mmcfd capacity land based FSRU installation activities are in progress.
However, from these two terminals, Petrobangla is importing around 750-800mmcfd gas and paying roughly US$237,000 per day to Excelerate and $217,000 to Summit everyday (including the capacity payment), which already create a huge pressure on national exchequer.
State-owned Rupantarita Prakritik Gas Company Ltd (RPGCL) was assigned to work to prepare a proposal and submit it to the Energy Ministry.
 "Technical committee is working to import RLNG from India. We hope the committee will submit a report soon. The final decision will be taken after discussions between the two countries. But, it will take some time," RPGCL official said.
RPGCL is analysing the financial issues regarding the import of RLNG from India through the cross-border pipeline.
"The main issue is tariff, if the price is same or less than the existing two FSRU's price then there is no question, but we need to know that first," official said.
"Yes, we have some gas crisis now, the import of RLNG will alleviate the temporary gas crisis in the country. But in the long run it will not a good idea, we need no, we need to go for gas exploration rigorously but we are taking all other bad options including LNG import from spot market," Prof Dr Shamsul Alam said.
The move is also to lessen forex pressure for importing LNG from the spot market, sources in the Energy Division said.
Petrobangla has two long-term contracts to import LNG - one with Qatar Ras Laffan Liquefied Natural Gas Company Ltd to import 1.8 million tonnes to 2.5 million tonnes, and another with Oman Trading International to import 1 million tonnes to 1.5million tonnes annually.
In fiscal 2020-21, Petrobangla imported 2.46 million tonnes of LNG from Qatar and 1.29 million tonnes from Oman.
Country's total daily gas consumption of 3,000 million cubic feet (mmcf), however, Petrobangla still faces a shortage of 600-700mmcf gas daily to meet the demand.