Russian firm offers to build failsafe onshore terminal

A Russian oil-and-gas exploration company has offered to build a failsafe onshore gravity-based structure (GBS) LNG terminal in Bangladesh to facilitate catering the country's insatiate gas demand.

Officials say Novatek, which has a strong footprint on global energy turfs, has proposed to build the 7.50-million-tonne-per-year (MTPA)- capacity facility at around US$730 million within 2.5 years of final approval.

"In its proposal, Novatek also has intended to build 270,000-cubic-metre LNG storage on the shore," a senior energy ministry official having knowledge on the matter told The Financial Express Monday.

Such liquefied natural gas (LNG) terminals are built in coastal areas onshore and LNG is transferred to the GBS terminal for regasification, said the official.

Unlike the country's two operational floating storage and regasification units (FSRUs), GBS's all-weather regasification unit can be operative braving rough seas as it is built on the shore, he added.

Besides, it does not need mooring dolphins, nor jetty or fender system or mooring system as it is independent of tide.

Any onshore equipment and facility can be relocated to GBS and onshore power plants can be relocated to GBS to get sufficient re-gasified LNG, said sources.

Novatek is the second-largest natural gas producer and seventh-largest publicly traded global company by natural gas production.

Currently, the two operational FSRUs -- owned by US Excelerate Energy and Summit Group each -- have the total LNG re-gasification capacity of around 1,100 million cubic feet per day (mmcfd).

The country's regasification facility needed expansion to cope with rising gas demand for industries and households that mostly remained unmet and warranted supply rationing.

Summit Group was in agreement for building a 3.75-MTPA FSRU near the offshore Bay of Bengal island Moheshkhali. However, after taking office, the incumbent government scrapped the deal with the embroiled business group in January this year.

Insiders fear the hiatus might lead to infrastructure constraints in coping with increased volumes of LNG.

Summit LNG Terminal II Ltd, a subsidiary, was supposed to build the 4.5-MTPA-capacity FSRU by 2026, on a build-own-operate-and-transfer (BOOT) basis.

Separately, the reformist interim government also cancelled the ongoing procedure of selecting a contractor to build a 7.50-MTPA land-based LNG terminal.

The cancellation of short-listing of bidders for the country's maiden land-based LNG terminal development results in lingering further the much-needed project to ensure stable LNG import and regasification, said sources

State-owned Rupantorito Prakritik Gas Company Ltd (RPGCL), a wholly owned subsidiary of Petrobangla, issued a notice cancelling the short-listing early October last year.

Summit's 3.75-MTPA FSRU and the 1,000-mmcfd-capacity land-based LNG terminal at Matarbari in Cox's Bazar were processed under the Quick Enhancement of Electricity and Energy Supply Act (Special provision-2010), as revised in 2021, bypassing competitive tender.

"The short-listing has been cancelled in line with the post-uprising government's decision to suspend all negotiations, selections, and purchasing process of all power and energy projects under the special law," says a senior energy-ministry official.

Incidentally, the halt came with the changeover as there had been widespread criticism of what came out to be indemnity law in energy sector that facilitated unsolicited deals and drain on public funds.

Azzizjst@yahoo.com