Update November 10, 2015

Dhaka 9-24 am, 13-August, 2020

IFC to provide 20pc of project costs

Sumel Sarker


IFC to provide 20pc of project costs

10 November 2015, Nirapad News: International Finance Corporation (IFC), a member of the World Bank Group, will provide 20 per cent of the total project costs to build the country’s first onshore LNG (liquefied natural gas) terminal at Matarbari on Moheshkhali Island in the Bay of Bengal, officials said.

The bid winning firm will arrange 60 per cent of the total costs and the remaining 20 per cent will be borne by state-run Bangladesh Power Development Board (BPDB), Mohammad Hossain, Director General of state-run Power Cell, told the FE Monday.

The number of short-listed firms for awarding the project has, however, increased to four from the previous three with the inclusion of the Chinese consortium of China Huanqiu Contracting and Engineering Corporation & Yifeng Industrial Gas Co Ltd.

Power Cell, a state-owned entity under the Ministry of Power, Energy and Mineral Resources (MoPEMR), along with the IFC representative had earlier short-listed three firms – Japan’s Mitsui & Co. Ltd, India’s Petronet LNG Ltd, Royal Dutch’s Shell EP International Ltd — to select one among them to build the LNG terminal.

The Chinese consortium was included on the shortlist after carrying out further evaluations by the Energy and Mineral Resources Division (EMRD) under the MoPEMR, sources said.

The selected short-listed firms would be requested to submit final proposals including costs and equipment and technology to be adopted to build the terminal soon, the Power Cell boss said.

Re-gasified LNG from the planned terminal is expected to be supplied to gas-guzzling industries including power plants and factories.

The planned onshore terminal would be the country’s second LNG terminal.

Power Cell sought to build the onshore LNG import terminal in the south with a handling capacity of 3.5 million tonnes per year on a build, own and operate basis.

The bid winning company will take a majority stake in the planned terminal, acting as an engineering, procurement and construction contractor.

It will be responsible for the design and commissioning of the terminal which will have receiving, offloading, storage and re-gasification facilities.

Other partners in the planned LNG terminal are state-owned BPDB and IFC InfraVentures fund.

Re-gasified LNG from the terminal would be sold on a long term, take-or-pay basis to a state-owned entity, which will have back-to-back gas sales agreements with power plant owners or operators and other customers.

Separately, Petrobangla is on final negotiations with US’s Excelerate Energy Ltd Partnership for building the country’s first floating LNG terminal at Moheshkhali Island in the Bay of Bengal.

Excelerate Energy will build the terminal within 16 months after the final deal.

LNG import through the offshore terminal might start by 2017, Petrobangla Chairman Istiaque Ahmad told Platts Monday.

The floating LNG terminal would have a capacity of 5 million tonnes per year and a re-gasification capacity of at least 500 million cubic feet per day (mmcfd).

It will have berthing and mooring facilities for LNG tankers with a capacity of 138,000-260,000 cu m, with the construction contract to be awarded on a build-own-operate-transfer basis for 15 years.

Petrobangla had already inked a ‘confidentiality’ deal with Qatar’s Ras Gas in Doha in early October over its planned import of LNG to meet mounting demand for natural gas of the South Asian country.

It was the first such agreement by any Bangladeshi companies to import LNG.

The country is now reeling under acute natural gas crisis with average output of around 2,700 mmcfd against the demand for over 3,200 mmcfd.

The country started facing natural gas crisis from 2009 with rapid industrialisation, forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, CNG-filling stations and households.

The LNG terminal is necessary for Bangladesh, which is facing an acute gas crisis due to fast depletion of current reserves and absence of new discoveries and is rationing gas supplies.

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