Reliance Power Ltd of India has attached a number of conditions for supplying liquefied natural gas to state-owned Petrobangla from its proposed LNG terminal in the Bay of Bengal.
Officials said the Indian energy giant wanted to set up the terminal on the Kutubdia Island instead of previously chosen Maheshkhali Island in the Bay in its proposed gas purchase agreement.
Reliance Power Ltd found Kutubdia Island more feasible than the Maheshkhali Island for setting up the floating terminal and importing 500 million cubic feet gas per day, said officials.
Reliance Power Ltd also wanted Petrobangla to set aside $1.4 billion fund annually as earnest money which worried the cash strapped state-owned energy supplier.
Officials said Petrobangla had already asked the energy division to arrange the required amount of money from the government as ‘assistance’.
Besides, Reliance Power Ltd pointed out that the necessity of signing an Implementation Agreement with the singing of gas purchase agreement with Petrobangla.
Energy division secretary Nazimuddin Chowdhury declined to talk on the proposed import of LNG through the floating terminal by Reliance.
On January 23, the energy division informed the ministry of finance about the requirement of financial security of Reliance Power Ltd, said the officials.
Newly appointed Petrobangla chairman Abul Mansur Md. Faizullah in a position paper pointed out that the proposed Implementation Agreement should be signed between Energy Division and Reliance Power Ltd.
He urged the ministry to expedite the process to pave the way for establishment of LNG terminal by Reliance Power Ltd and import of 500 million cubic feet gas daily.
He said 110 million cubic feet gas from the terminal would be supplied to Meghnaghat power plant for generation of electricity and the rest would be sold to Petrobangla.
There is a supply shortage of 500 to 700 million cubic feet natural gas daily in the country in absence of sufficient gas exploration activities.
In January, local Summit Group signed an initial contract with Petrobangla to set up a liquefied natural gas terminal on Moheshkhali Island at a cost of about $500 million.
Another Indian energy company Petronet signed a memorandum of understanding with Bangladesh Oil, Gas and Minerals Corporation on December 30 to set up an LNG regasification terminal on Kutubdia Island.