Petrobangla signs 2nd deal to import LNG from India
The state agency had signed the first agreement with Indian Oil Corporation Ltd (IOCL) in 2018 for same purpose
Highlights
- Petrobangla signs MoU with India's H-Energy
- Regasified LNG will be supplied through West Bengal
- 10 LNG based plants with 12,155 MW capacity coming up
- It will create an additional daily demand of 2,000mmcf gas
- Bangladesh currently imports 1,000mmcf gas per day
- Supply is now 3,331mmcfd against demand of 3,760mmcfd
- Petrobangla had signed a deal with IOCL back in 2018
Petrobangla – the Oil, Gas and Mineral Corporation of Bangladesh – has signed a second agreement to import liquefied natural gas (LNG) from neighboring India, which is also an importer of energy.
Petrobangla inked a memorandum of understanding (MoU) with Mumbai-based Hiranandani Energy (H-Energy) on 16 June for long-term import of regasified LNG from India through a cross-border natural gas pipeline, officials at the state agency said.
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H-Energy will build and operate Kanai Chatta-Shrirampur natural gas pipeline, which will connect H-Energy's LNG terminal in West Bengal to Bangladesh through various regions of the state for enabling cross border supply of regasified LNG.
On the matter, Petrobangla Secretary Syed Ashfaquzzaman said, "A non-binding agreement has been signed with H-Energy, which is a very preliminary one. We will have to discuss major issues such as the quantity of LNG, its rate and charges."
Petrobangla had signed the first agreement with Indian Oil Corporation Ltd (IOCL) in 2018 for the same purpose. However, no progress has been made on the issue since then, said a source at the state agency.
They added that such MoUs are not that of a big deal, and those can be rejected at any time. Petrobangla signed the deal with H-Energy because the company had shown interest in this sector.
In a statement, however, the CEO of H-Energy Darshan Hiranandani said, "This is a key milestone in the future of Indo-Bangladesh energy cooperation. Our objective is to deliver environmentally friendly, safe, and economical energy to the state of West Bengal and to western Bangladesh.
"Thanks to the efforts of all stakeholders, most permissions are in place and we shall see important milestone after milestone in this project happen at a rapid pace."
At present, besides production at domestic gas fields, Bangladesh imports LNG through two private Floating Storage and Re-Gasification Units (FSRU) – which have a capacity to supply 1,000 mmcf gas per day.
As per contract obligation, Petrobangla pays roughly $237,000 per day to Excelerate and $217,000 to Summit each day in the form of capacity payment, even if Bangladesh takes less volume of LNG, said a Petrobangla official.
The government now plans to increase the LNG import volume as the domestic gas fields' reserve is depleting gradually, while the upcoming 10 LNG-based power plants with a capacity of 12,155MW of electricity are signalling an additional demand of 2,000mmcf of gas per day.
