Building Bangladesh's Third LNG Terminal: Numerous global energy majors vying for deal

Half a dozen international firms are vying for contract to construct a new floating storage and regasification unit (FSRU) at Moheshkhali island as Bangladesh opts for enhancing LNG-handling capacity amid falling domestic gas reserves against rising demand.

Sources say they have submitted proposals either to state-run Petrobangla, the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources, or both, in the hope of securing a new contract to develop the facility near the country's two existing FSRUs that treat the imported liquefied natural gas or LNG.

Oman's OQ Trading International, Saudi Arabia's Aramco Trading, Azerbaijan's Socar, US-based Excelerate Energy, and Russia's Novatek are among the global players interested in setting up the FSRU or related infrastructure used for regasifying imported LNG to feed into national grid, according to market insiders.

"We have received proposals from a good number of international firms showing interest in developing a new FSRU," Petrobangla Chairman Md Rezanur Rahman told The Financial Express.

He notes that the government may award the contract considering the growing need for ramping up the LNG-regasification capacity in the wake of depleting domestic reserves.

The project could be awarded either through an international tender or via government-to-government negotiations, with emphasis on securing lower costs than that of previous projects, he adds.

Bangladesh's LNG-regasification capacity has reached a near-saturation point at about 1,050 million cubic feet per day (mmcfd), with its two operational FSRUs running at roughly 96 per cent of capacity.

Current infrastructure allows for a maximum regasification of 1,100mmcfd, provided both FSRUs run at full capacity, Petrobangla data show.

At present, the US-based Excelerate Energy's FSRU on the Bay of Bengal has 600-mmcfd capacity, while Summit Group's FSRU can regasify around 500mmcfd. To fully utilise these facilities, Bangladesh would need to import 115 LNG cargoes annually, officials say.

This year, Petrobangla is importing 108 LNG cargoes--the highest ever in a single year--and plans to bring in seven more to reach saturation and supply additional gas to state-run fertiliser factories.

Since early June, over 1,000mmcfd LNG has been regasified daily, following a government decision to import six additional cargoes to boost supply to industries.

Before awarding a new FSRU contract, the government has decided to carry out a feasibility study for a 4.5-million-tonne per-annum (MTPA) facility at Moheshkhali.

The state-run Infrastructure Investment Facilitation Company (IIFC) will conduct the study "in the shortest possible time".

The post-uprising interim government revived plans for a new FSRU after cancelling an earlier deal with Summit Group to build a similar terminal at the same location.

Last year, the EMRD gave the state corporation Petrobangla the go-ahead to invite international tenders under the Public Procurement Act 2006, Public Procurement Rules 2008, or the Bangladesh Public-Private Partnership Act 2015 to fast-track implementation.

Previously, the government had scrapped both the Terminal Use Agreement (TUA) and the Implementation Agreement (IA) signed with Summit LNG II Terminal Co Ltd, a subsidiary of Summit Group, which had been tasked with developing a 4.5-MTPA FSRU at the offshore island. The facility was to be set up on a build-own-operate-transfer (BOOT) basis by 2026, operating for 15 years with a daily fee of US$300,000 under a binding take-or-pay clause.

The agreements were signed on March 30, 2024 under the now-defunct Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 (amended 2021) to establish the third FSRU.

Summit had already conducted a met-ocean survey for the project and submitted its findings to the state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) before the cancellation.

Summit Group's existing 3.75-MTPA FSRU, under Summit LNG Terminal Co Ltd, has been operational on the Moheshkhali island since April 2019 and will continue until 2033 under its current contract.

Excelerate Energy's 4.5-MTPA FSRU, also at Moheshkhali, commenced operation in August 2018.

Bangladesh's overall natural gas production currently stands at around 2,821mmcfd, including 1,033mmcfd regasified LNG, according to Petrobangla data as of September 23, 2025.

Azizjst@yahoo.com