A fresh move to build FSRU at Moheshkhali

The government will conduct feasibility for building a new floating-storage and regasification unit (FSRU) at Moheshkhali island in the Bay of Bengal with a capacity of 4.50 million tonnes per year (MTPA).

"The state-owned Petrobangla has already decided to engage the state-run Infrastructure Investment Facilitation Company (IIFC) to carry out the feasibility study within the shortest possible time," Petrobangla Chairman Md Rezanur Rahman told The Financial Express Monday.

The IIFC, an enterprise of the Economic Relations Division under the Ministry of Finance, is expected to complete the feasibility study within the next couple of months, he said.

Several international companies along with their local partners have already submitted proposals to Petrobangla as well as the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR) for building the proposed FSRU on Moheshkhali island near the two existing and operational FSRUs.

"We may award the job of building a new FSRU for Bangladesh on completion of the feasibility study," said Mr Rahman.

According to officials, the interim government has taken a fresh move to build a new FSRU on Moheshkhali island after scrapping a deal with the Summit Group to build a similar terminal at the same place, said sources.

Last year, the EMRD instructed Petrobangla to take steps in this regard.

Bangladesh's liquefied natural gas (LNG) re-gasification has reached almost the saturation level to around 1,053 million cubic feet per day (mmcfd) with the country's two operational FSRUs running at 95.72-per cent capacity.

With the present infrastructure, the country has the capacity to re-gasify around 1,100 mmcfd in maximum, provided that both the FSRUs run in full capacity, a senior Petropangla official said.

The MPEMR in last year directed Petrobangla to float international tender either under Public Procurement Act 2006, Public Procurement Rules 2008 or Bangladesh Public-Private Partnership Act 2015 to implement the FSRU project at Moheshkhali in the shortest possible time, he said.

The interim government took the decision to build the FSRU afresh at Moheshkhali following recommendation of a four-member committee, consisting of purchase experts, and a deputy attorney general.

The government previously scrapped the Terminal Use Agreement (TUA) and Implementation Agreement (IA) with Summit LNG II Terminal Co. Ltd on building a 4.50 MTPA re-gasification capacity FSRU on Moheshkhali island in the Bay of Bengal in line with the recommendation of the committee, he added.

The Summit LNG II Terminal Co. Ltd, a subsidiary of the country's leading privately-owned business conglomerate in the energy sector, was to build the FSRU on build, own,

operate and transfer (BOOT) basis by the year 2026 and continue its operations for 15 years.

The daily fee, as agreed, was US$300,000 per day on a binding take-or-pay basis, it was learnt.

The TUA between Petrobangla and Summit LNG Terminal II Co. Ltd. and the IA between Energy and Mineral Resources Division and Summit LNG Terminal II Co. Ltd. were signed on March 30, 2024.

It was supposed to be Bangladesh's 3rd FSRU.

The Summit carried out a met-ocean survey over its second LNG FSRU and submitted a report to the state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) before getting the project cancelled.

Summit Group's existing 3.75 MTPA FSRU -- Summit LNG Terminal Co Ltd - located on Moheshkhali island in the Bay of Bengal, started commercial operation on April 30, 2019, and would remain operational for 15 years until 2033 as per the existing contracts.

Another 4.5 MTPA FSRU, owned by US's Excelerate Energy, has been operational on the same Moheshkhali island since August 2018.

To utilise both the FSRUs in full swing, Bangladesh will require to import 115 LNG cargoes in a year, said the official.

The state-run Petrobangla is importing a total of 108 LNG cargoes this year (2025), the highest number in a single year.

It has planned to import seven additional LNG cargoes to reach the saturation level for supplying natural gas to gas-starved state-run fertiliser factories.

At present, the country's overall natural gas output is around 2,800mmcfd, including 1,035 mmcfd of re-gasified LNG, according to data from Petrobangla as on September 7, 2025.

Azizjst@yahoo.com