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3 years ago

Excelerate, Summit to build two more storage, regasification units

File photo used for representational purpose. (Collected)
File photo used for representational purpose. (Collected)

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US-based Excelerate Energy and local Summit Group have initiated the process of building one more FSRU (floating, storage and re-gasification unit) each to meet the rising demand for natural gas in the country.

They have submitted proposals to the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources in this connection. Both the companies are seeking to build their second FSRU at Payra in southern Bangladesh, a senior official of the energy ministry told the FE on Sunday.

They are now lobbying with the government high-ups to get permission to build the FSRUs having the capacity to re-gasify around 3.75 million tonne per year (MTPA) through unsolicited deals under the Speedy Supply of Power and Energy (Special Provision) Act 2010 bypassing the tender process.

The law has a provision of immunity to those involved with a quick fix in the energy and power sector.

Both the companies earlier had secured the permission to build their first FSRU each and supply re-gasified LNG under the special law, as the state-run Petrobangla did not float any international tender to select contractors to do the job.

Petrobangla has not floated any tender yet to select contractors to build or install FSRUs at Payra where Excelerate and Summit have proposed to build the floating LNG import terminals.

The government should select engineering, procurement and construction (EPC) contractors, instead of awarding private sectors to build more FSRUs bypassing tenders, energy adviser of the Consumers Association of Bangladesh (CAB) Professor M Shamsul Alam told the FE.

Petrobangla should have stakes in future FSRUs or such types of infrastructures, he stressed.

Separately, the Excelerate Energy is eyeing to ink a joint development agreement (JDA) with the state-run North-West Power Generation Company Limited (NWPGCL) along with Germany's Siemens and China's CMC to implement a 3,600 megawatt (MW) LNG-based combined cycle power plant at Payra in southern region.

The NWPGCL board of directors has already approved the proposed JDA and sent it to the Power Division under the energy and mineral resources ministry for the final approval.

The NWPGCL has already acquired necessary land to implement the LNG (liquefied natural gas) based power plant project, which would be implemented after establishing a joint venture (JV) company.

Feasibility study and environmental social impact assessment study over the power plant project have already been completed.

A concept study on the LNG terminal of the project and gas infrastructure has also been completed and a detailed feasibility study is under process.

The power plant will require around 450 million cubic feet per day (mmcfd) of natural gas to generate electricity.

Officials said Germany's Siemens AG and NWPGCL had inked a memorandum of understanding (MoU) in November 2017 to implement the power plant.

The power plant would be implemented in three phases along with liquefied natural gas (LNG) re-gasification terminal and necessary gas pipelines, adjacent to the currently under construction Payra 1320 MW thermal power plant site.

Bangladesh started importing LNG in August 2018.

Bangladesh has a 15-year contract with Qatargas to import around 2.5 million tonnes of LNG per year, at a 12.65 per cent slope of the three-month average Brent price plus a 50-cent constant.

It has a similar contract with Oman's Oman Trading International (OTI) for 10 years at an 11.9 per cent Brent slope plus 40 cents.

Excelerate and Summit's two operational FSRUs have the capacity to re-gasify around 500 mmcfd equivalent LNG each.

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