The government has initiated a move to borrow $668.55 million from foreign lenders to start importing liquefied natural gas, whereas the country requires total $1,444.20 million or Tk 11,842.44 crore for LNG imports.
‘A six-member team is scheduled for February 24 to visit Saudi Arabia to attend a meeting with Islamic Development Bank to source the required funding,’ an energy division official told New Age on Thursday.
Petrobangla, state-run Oil, Gas and Mineral Resources Corporation, has already been assured of obtaining a revolving fund worth $844.20 million or Tk 6,922.44 crore from Energy Security Fund, he said, adding that the remaining amount would be sourced from foreign lenders as the government was unwilling to provide any part of the seed money.
The Bangladesh Energy Regulatory Commission created the fund through increasing gas prices by Tk 1.01 a cubic metre with effect from September 1, 2015.
Petrobangla is expected to begin imports of LNG this year to increase gas supply by 1,000 million cubic feet a day or 28.32 million cubic metres a day.
US company Excelerate Energy is scheduled for April and local company Summit for October to install two floating terminals and other infrastructures on the Moheshkhali Island, Cox’s Bazar, to facilitate increasing gas supplies by 500mmcfd each from imported LNG.
Besides, the government plans to import LNG at small scale using the platform and pipelines installed for the Sangu offshore gas field and the jetties of fertiliser factory KAFCO and CUFL in 2018, said officials.
The energy division and Petrobangla estimated that it would require $1,444.20 million or Tk 11,842.44 crore in the first year of LNG imports.
Of the total amount, $844.20 million would be required for paying the price of LNG, its premium and re-gasification charge at the two floating terminals while $600 million would be required for the small-scale imports, the officials said.
On September 25, 2017, Petrobangla signed a 15-year unsolicited contract with Qatar’s state-run RasGas Company Limited to import 1.8 million tonnes of LNG a year for the first five years and 2.5 million tonnes for the next 10 years.
Negotiations with companies of four other countries are underway to source more LNG, said officials.
In the wake of failure in oil and gas exploration and fast declining existing reserves, the government in 2010 initiated to install a floating terminal and re-gasification unit near Moheshkhali Island to facilitate LNG import to increase gas supply by 500mmcfd.
In 2015, the government revised the plan setting a target to increase gas supply to 2,500mmcfd from imported LNG. To accommodate expensive LNG, the government has already decided to waive all the duties and taxes except 15 per cent VAT on the natural gas.
A government study showed that the price of natural gas would require to be increased further by more than 60 per cent on an average for 3,700mmcfd gas supplies with 1,000mmcfd from imported LNG and 2,700mmcfd from indigenous gas fields. The estimate also assumed the price of LNG at $7 per unit (equivalent to 1,000 cubic feet) and re-gasification charge at $0.50 per unit.
Petrobangla supplies natural gas at Tk 7.50 per cubic metre on an average and its daily gas supply has already reduced to 2,680mmcfd from indigenous sources.
The LNG price is also on the rise at the international market with the rise in oil prices.
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