Summit to set up 3rd floating LNG terminal at Moheshkhali

The government has approved a proposal in principle for awarding Summit Oil and Shipping Company Limited the work of setting up the third floating LNG terminal at Moheshkhali in Cox's Bazar.

The proposed floating LNG terminal would have a regasification capacity of dealing with 600 million cubic feet (mmcf) LNG per day.

The approval came from the meeting of the Cabinet Committee on Economic Affairs held on Wednesday virtually with Finance Minister AHM Mustafa Kamal in the chair.

Briefing reporters after the meeting virtually, Cabinet Division's Additional Secretary Sayeed Mahbub Khan said the meeting also approved three proposals in principle from the industries ministry and a proposal in principle from the Health Services Division.

The government is going to sign a Build-Own-Operate-Transfer (BOOT) contract with the Summit Group next month, said a source at the Bangladesh Oil, Gas and Mineral Resource Corporation (Petrobangla).

Summit Group would net around $6.5 million per month from the upcoming project, said the source.

It is expected to be operational by 2026, Mohd Nurman, Summit's general manager for long-term supply and infrastructure development, told Kpler, the leading provider of intelligence solutions for commodity markets, during the FSRU Asia Summit in Singapore on 1 June.

In an official statement, Summit Group said an estimated investment of $500 million would be required in order to provide storage for about 170,000 cubic metres of LNG along with port services and vessel management in deep sea including the ability to do Ship-to-Ship (STS) transfer of LNG.

"The FSRU will supply at least 600 million cubic feet per day (mmcfd) gas, capable of increasing to 800 mmcfd and the location of this facility will be about five kilometres off Moheshkhali island in the deep seas, utilising the vast Bay of Bengal areas," the statement reads.

"We will lay an approximately five-km subsea pipeline, 24 inches in diameter, at 5 metres depth into the sea bed. These pipelines will connect to the National gas transmission network with the FSRU," it further added.

At present, Bangladesh has two FSRUs at Moheshkhali in Cox's Bazar with a capacity to re-gasify 1,000 mmcf (500 mmcf each) gas per day.

One FSRU is owned and operated by the American company Excelerate Energy and the other one is by Summit Group.

The government has to pay $4,54,000 per day as the capacity charge for the two existing LNG suppliers.

At present, the country has a gas demand of 3,500 million cubic feet (mmcf) per day while the supply is 3,000 mmcf. Of the total supply, 750 mmcf to 800 mmcf comes from LNG imports and the rest from local gas fields.

Petrobangla projected that the daily demand would reach 4,000 mmcf by 2026 and contribution from LNG imports would cross 1,500 mmcf.