On 31 March, Bangladesh National Oil and Gas Corporation Petrobangla signed a preliminary agreement on construction and operation of the country’s first floating LNG terminal with a division of the US-based Excelerate Energy, as reported by the Bangladeshi business review The Financial Express.
Designed to accept, store and subsequently regasify up to 500 million cubic feet of natural gas per day initially, the terminal will be built on the Moheshkhali island in the Bay of Bengal by the end of 2017. Excelerate Energy Bangladesh Ltd, a local subsidiary, will be the operator of construction and further 15-year-long operation of the terminal under concession.
According to the Petrobangla management, the cost of the terminal operator services will exceed $200.000 per day under the agreement. The regasified fuel will be supplied to the national gas distribution system on a 'take or pay' basis. Thus, from early 2018, the Bangladeshi national company will be spending at least $1.6bn on importing and subsequently regasifying LNG at approximately $8 per 1.000 cubic feet or $286 per 1.000 cubic meters, the newspaper specifies.
It is also reported that the LNG for the new terminal will be supplied from Qatar. A respective Memorandum was signed with this Arab country earlier.
Petrobangla intends to sign the final agreement with Excelerate Energy once all of the terms are approved by the Bangladeshi Government, said Ishtiaq Ahmad, head of the company, in an interview.
The project for construction of the terminal for acceptance and regasification of LNG was adopted way back in 2010. However, it took almost six years to find a company to implement it.
The plans of the Republic’s Government include the construction of a total of four terminals to accept, store and refine liquid hydrocarbons.
For several years, Bangladesh has been experiencing a severe shortage of energy resources, which currently exceeds 5 billion cubic meters per year. There are 26 discovered gas fields in Bangladesh, with production conducted at 20 of them, reaching a volume of under 28 billion cubic meters per year. Petrobangla estimates the country’s proved reserves at over 15 trillion cubic feet (more than 400 billion cubic meters). At the current production rate, these reserves may last until approximately 2031.
In the end of 2014, Gazprom International, the sole specialized operator of Gazprom's hydrocarbon exploration and development projects outside the Russian Federation, entirely fulfilled its obligations within the framework of its first joint project with Bangladesh under two drilling contracts signed on 26 April 2012 with BAPEX, BGFCL and SGFL, Petrobangla’s subsidiaries. In accordance with those agreements, ten wells were designed and built at six fields of Bangladesh. Tests showed that maximum total production rate amounted to 5.1 million cubic meters per day, which is equal to 16.8% of Petrobangla’s production volume and to 7.5% of the total yield in the country.
In September 2015, Gazprom International and Petrobangla's business units signed two additional agreements for construction of five new wells. Under these contracts, Gazprom International will design and drill five additional production wells: three wells at the Rashidpur field, one well at the Srikail field and one well at the Bakhrabad field. On 15 February 2016, drilling of the first well (Srikail-4) was commenced.
In July 2014, during a meeting between the Managing Director of Gazprom International and Sheikh Hasina, the Prime Minister of Bangladesh, apart from the plans to continue cooperating in the sphere of services, the sides discussed their intention to establish a joint venture with one of Petrobangla's subsidiaries to work in Bangladesh and in third countries.
Photo: The Financial Express