BD set to import LNG from Qatar's RasGas

Bangladesh is set to import 3.75 million tons of LNG at an estimated cost of US$2.28 billion per annum from Qatar state-owned company RasGas.
 "The cabinet committee on economic affairs accepted a proposal from the Energy and Mineral Resources Division to negotiate with RasGas for fixing tariff on LNG import under a government-to-government negotiation. A Qatari team is now visiting Dhaka and negotiating the price," a senior official of the Energy Division told The Daily observer preferring anonymity.
As per their estimate from a year ago, the purchase rate of LNG will be $8 for one million British thermal units or MMBTU. Accordingly, Bangladesh will have to spend about $1.85 billion every year.
Bangladesh is facing supply shortage of 700 million mmcf of gas per day. The government has been considering setting up of several LNG terminals in the country for importing gas and an agreement in this regard has already been signed with Excelerate Energy Bangladesh Limited (EEBL), a subsidiary of US-based Excelerate Energy.
The terminal will be set up at Moheshkhali in the Bay of Bengal and will handle imported LNG 500 million cubic feet per day and supply it to the national grid from early 2018. So, the government needs to complete all necessary job including ensuring the LNG supply.
"A high-level government team is set to leave for Qatar this month to initiate a deal with Qatar's RasGas to import LNG seven years after inking a MoU," LNG Cell chief Mohamed Quamruzzaman said.
Petrobangla had signed a memorandum of understanding (MoU) with Qatar in January 2011 to import around 4mn tonnes of LNG annually.
It extended the deadline of the MoU twice due to delay in works to build LNG terminal.
Petrobangla inked a "confidentiality" deal with RasGas in Doha in October 2015 to facilitate import of LNG. Following that deal Petrobangla awarded deals to private sector for building LNG terminals under Electricity and Energy Supply (Special Provision) Act, 2010 bypassing competitive tender process.
It later inked a MoU on December 29, 2016 with India's Petronet to build another LNG terminal at Kutubdia Island having a capacity to handle around 1,000 mmcfd of imported LNG. Petrobangla again initiated a deal with Summit LNG Terminal Company Pvt Ltd on January 4 to build another FSRU at Moheshkhali island having the capacity to handle around 500 mmcfd of gas.
It has now moved to sign a deal with India's Reliance to build another LNG terminal at Moheshkhali Island, the senior Petrobangla official said.
State-run Power Cell has also planned separately to build a LNG terminal in the same area at Moheshkhali.
Under the deals, Petrobangla would have to pay charges and fees to the LNG terminal builders even if it does not import LNG through the terminals, Petrobangla sources said.
Petrobangla has estimated that the government would have to spend around $1.57billion annually to import LNG only through the terminal to be built by Excelerate at an estimated cost at US$8 per mmcf excluding the other projects.
Meanwhile, Bangladesh and Qatar have signed a memorandum of understanding (MoU) on cooperation between the central banks of the two countries for smooth disbursement of money exchange for LNG import/export.
Foreign Minister of Bangladesh Abul Hassan Mahmood Ali and Central Bank Governor of Qatar Sheikh Abdulla Bin Saoud Al-Thani signed the MoU at Qatar Central Bank on Monday after fruitful talks regarding cooperation of the two central banks, according to the Foreign Ministry.