Russian energy giant Novatek proposes to build offshore LNG terminal in Bay of Bengal

In a striking move that could reshape Bangladesh's energy future, Russian energy giant Novatek has proposed building a $950 million offshore LNG terminal in the Bay of Bengal - a structure designed to weather cyclones, outlast conventional terminals by decades, and save the cash-strapped nation roughly $250 million in upfront costs.

The gravity-based structure (GBS), presented to Petrobangla on Wednesday, would sit fixed to the seabed like a concrete fortress, receiving, storing and regasifying imported LNG at a capacity of 7.5 million tonnes per annum (MTPA). If built, it would become one of the most durable pieces of energy infrastructure in the country's history - designed to last 60 to 80 years, compared with 40 to 60 years for a conventional land-based terminal and a mere 15 years for the floating storage and regasification units (FSRUs) Bangladesh currently relies on.

The price tag: about $950 million, versus an estimated $1.2 billion for a conventional 7.5-MTPA land-based terminal - a 21 percent saving that could appeal to a government grappling with rising LNG import bills and persistent gas shortages.

But the proposal comes with caveats. The figures are Novatek's own estimates, not independently verified, and have not been compared with the government's feasibility study for the planned 7.5-MTPA land-based LNG terminal at Matarbari. Novatek has not yet submitted a formal proposal, and Petrobangla is treating the concept with cautious interest.

"It was a very preliminary-level presentation. We have learned from them. We would discuss it later with the higher-ups," a top Petrobangla official told The Daily Star.

A Different Kind of Terminal
The central difference between the proposed GBS and a conventional terminal is location. A land-based terminal keeps LNG storage tanks and regasification facilities on the coast, with carriers unloading through marine facilities. A GBS would instead place storage and regasification offshore on a large reinforced-concrete structure fixed to the seabed, sending gas to the national grid through a subsea pipeline.

Both systems perform the same basic functions: receiving LNG, storing it, converting it back into gas and supplying it to the gas network. Novatek has identified deep-sea areas around Moheshkhali and Matarbari as possible locations.

The company estimates a GBS could be built in 30 to 36 months - significantly faster than the 48 to 60 months required for a land-based terminal. An FSRU, by comparison, could be deployed in 24 to 30 months but would have a design life of only about 15 years, according to the presentation.

Bangladesh currently imports LNG through two FSRUs at Moheshkhali and plans to add a third. The government has also revived efforts to develop its long-delayed 7.5-MTPA land-based LNG terminal at Matarbari. The GBS proposal could therefore offer another option as Bangladesh faces persistent gas shortages, declining domestic production and growing dependence on imported LNG.

Recent disruptions at the country's FSRUs have also exposed the vulnerability of LNG import facilities to technical problems and adverse weather. Reduced LNG send-out during such disruptions has further squeezed gas supplies to power plants and industries.

Built to Withstand Cyclones
Novatek has proposed two GBS configurations. The larger one would have a gross LNG storage capacity of about 290,000 cubic metres, while the smaller one would hold about 194,000 cubic metres. Both would have 7.5 MTPA of regasification capacity, 1 MTPA of LNG bunkering capacity and 42MW of captive power generation capacity. The larger structure would also be capable of receiving the world's largest LNG carriers, according to the presentation.

Weather resilience is one of the main advantages claimed for the technology. Novatek describes the GBS as a stationary, all-weather terminal with "very high" resistance to cyclones. FSRUs, by comparison, can face operational disruptions from strong winds, high waves and currents.

Those claims, however, would need to be tested for the proposed site. The presentation itself calls for a detailed study of weather and marine conditions, including extreme winds, waves, storm surges, currents, seabed conditions and the safe berthing and transfer of LNG carriers.

The main GBS facility would not require coastal land, according to the proposal. Some onshore infrastructure would still be necessary, however, to connect the subsea gas pipeline to the national transmission network.

The technology draws on GBS structures developed by Russia's Novatek, which has used large concrete gravity-based structures for its Arctic LNG 2 project. The application in Bangladesh would be different: the Arctic LNG 2 structures house LNG production and liquefaction facilities, while the proposed Bangladesh facility would receive imported LNG, store it and convert it back into gas for domestic use.

'Virtual Pipeline' and Regional Hub
The proposal also includes a second phase in which small, shallow-draft vessels would transport LNG from the offshore terminal to riverbank facilities near Meghnaghat, Ashuganj, Ghorashal and Bheramara. Novatek calls this a "virtual pipeline" that could supply major gas-consuming areas without relying entirely on the existing pipeline network.

The idea comes as the government is also exploring the use of ISO tanks from Malaysia to transport LNG to gas-starved areas outside the main gas network. ISO tanks would carry LNG in standardised cryogenic containers by road or other transport modes and would serve relatively small volumes. Novatek's proposed system, in contrast, would move much larger volumes using dedicated LNG vessels to riverbank regasification facilities.

Novatek also sees the GBS becoming a regional LNG transhipment and bunkering hub. The presentation identifies potential shipments from Bangladesh to India, Pakistan, Sri Lanka, Vietnam, Malaysia and Indonesia using small and medium-sized LNG vessels.

The Road Ahead
Novatek has proposed an investment model based on foreign direct investment, but the presentation does not provide details on the commercial structure, tariffs, financing costs or expected investor returns. The lack of such details, along with the preliminary nature of the proposal, suggests that any decision by the government will require further scrutiny and independent verification of the company's cost and performance claims.

For now, the GBS concept adds a new dimension to Bangladesh's long-term LNG import planning, offering a potentially cheaper, longer-lived and more weather-resilient alternative to both FSRUs and conventional land-based terminals - provided the claims stand up to detailed feasibility studies.

If they do, the Bay of Bengal could one day host a concrete giant capable of anchoring the nation's energy security for generations.