Co gets another FSRU as country banks on LNG import

Summit Oil and Shipping Co Ltd gets the go-ahead for setting up its second Floating Storage and Regasification Unit (FSRU) in the bay as Bangladesh increasingly relies on imported gas amid local energy shortages.      

Officials said the cabinet committee on economic affairs (CCEA) in a meeting Wednesday gave the approval in principle for the new terminal, to be set up at the LNG hub on Moheshkhali island in the Bay of Bengal under Cox’s Bazar district.

It happens to be the country’s third floating terminal for re-gasifying and transiting imported liquefied natural gas or LNG into the national gas grid.

Finance Minister AHM Mustafa Kamal presided over the meeting that also endorsed few other government purchase proposals.  Cabinet division additional secretary Sayed Mahbub Khan briefed newsmen after the meeting was over.

The new terminal with 600mmcfd capacity will be a second one for the Summit Group which has another 500mmcfd terminal nearby. US-based Excelerate Energy owns another LNG terminal in the same area.

The Excelerate Energy had signed deal with Petrobangla in July 2016 to set up the 500mmcfd LNG terminal. The terminal began supplying gas into the grid in August 2018.

The Summit Group had signed deal with Petrobangla for its first LNG terminal in April 2017 and the terminal came into operation in two years.

Total gas demand in the country hovers around 4000mmcfd but the supply stands at about 3000mmcfd with local natural gas and imported LNG combined, leaving a deficit of around 1000mmcfd. 

Economists and energy experts are critical of expensive LNG import in the wake of foreign-exchange crunch, and they suggest ramping up local gas exploration, including in the Bay of Bengal.          

Mr Khan said the CCEA also approved in principle Bangladesh Chemical Industries Corporation (BCIC) proposal on import of 390,000 tonnes of urea fertiliser from UAE-based Fertiglobe Distribution Ltd in fiscal year 2023-24 under government-to- government (G-to-G) arrangement.

Also given to BCIC is the go-ahead to import 480,000 tonnes of urea fertiliser from Muntajat, Qatar, in the forthcoming fiscal year under the G-to-G deal and import of an undisclosed volume of urea from SABIC Agri-nutrients Company, Saudi Arabia, under G-to-G deal.

Moreover, the committee approved in principle procurement of 27 types of drugs by Community-Based HealthCare Authority under direct-purchase method for 14,200 community clinics.

On the same day, the cabinet committee on government procurement (CCGP), with the finance minister in the chair, approved for Petrobangla to buy 3.36 million MMBTU liquefied natural gas from M/S Excelerate Energy LP, the United States, at a cost of Tk 5.746 billion. Each unit of LNG will cost the exchequer $13.9.

 The meeting also approved BCIC buy of 30,000 tonnes of bagged granular urea fertiliser from KAFCO, Bangladesh, at a cost of Tk 1.044 billion.

 The BCIC was also given approval to buy 30,000 tonnes of bulk granular urea fertiliser from Fertiglobe Distribution Ltd, UAE, under G-to-G agreement at a cost of Tk 941. million.

 Also, the corporation was given approval to procure 30,000 tonnes of bagged granular urea fertiliser from Muntajat, Qatar, under G-to-G agreement at around Tk 980.5 million.

 The cabinet committee authorised the Trading Corporation of Bangladesh (TCB) to buy 12,500 tonnes of sugar from a Singaporean company at Tk 645.20 million and 8.0 million litres of soybean oil from City Edible Oil Company Ltd at a cost of Tk 1.613 billion.

 Also, the committee gave all-clear to the Community-Based HealthCare Authority to buy 27 types of medicines for 14,200 community clinics from the Essential Drugs Company Ltd at a cost of Tk 2.50 billion.

 syful-islam@outlook.com