The fate of the proposed third floating LNG terminal will be decided through an open tender. Petrobangla Chairman Janendra Nath Sarkar has confirmed that a preliminary survey will be conducted before the construction of the fourth floating terminal.
The Petrobangla Chairman told Barta24.com that it has been decided to conduct a feasibility study on the proposed fourth terminal in the Payra area. There are cost issues in building a long pipeline, and again, there is an issue of navigability. The feasibility will be verified first to see how much gas will come through the floating terminal and whether it will be economically successful. Only if there is a possibility of being economically successful, the terminal will be built.
Currently, there are two floating LNG terminals operating in the country. One is being operated by Accelerate and Summit Group. The previous Awami League government had signed a special agreement with Summit Group under a special law to build the proposed third (Moheshkhali) floating LNG terminal (FSRU). On the other hand, the government signed a term sheet with American company Accelerate Energy in November 2023 to provide the fourth (Payra) terminal without any tender. The term sheet mentioned what the agreement would include. Accelerate Energy was officially informed about the cancellation of the agreement last week to repeal the Special Powers Act.
Accelerate Energy is currently operating a floating terminal in Maheshkhali. It is supplying 600 million cubic feet of gas daily through that terminal. The agreement was signed with Petrobangla on July 18, 2016. The company was going to build another floating terminal in Payra.
On the other hand, the Awami League government signed an agreement with Summit Group on March 30 this year under a special law without any tender. On December 6, 2023, the Cabinet Committee on Government Procurement approved the draft agreement for the country's third floating LNG terminal in Maheshkhali, Cox's Bazar.
According to the agreement, Summit Group was supposed to receive a daily regasification charge of 300,000 dollars (equivalent to Tk. 3 crore 31 lakh 50 thousand at the exchange rate specified in the agreement) for a period of 15 years from the launch of the terminal. Summit Group had to pay about Tk.17,354 crore (Tk.110 to the dollar) for the regasification charge of the terminal over the period of 15 years. This was canceled by Petrobangla in October. Although Summit Group has threatened to take legal action in this regard. Petrobangla sources said that the state-owned Sylhet Gas Field Company Limited is charging Tk. 1, Bangladesh Gas Field Company is charging Tk. 1.25, and Bapex is charging Tk. 4. The average price of gas purchased from multinational companies Chevron Bangladesh and Tallo is Tk. 6.07 per cubic meter. Approximately 2000 million cubic feet of gas is being obtained from these domestic sources daily. 900 million gas is being supplied from LNG imports. The average price increased from Tk. 6.06 to Tk. 24.38 in the 2023-24 fiscal year, when the price of LNG brought from the sports market fell to Tk. 65, which had to be bought at Tk. 71 in August (2024). It is difficult to import one-third, at that time the reserves of domestic gas fields were running out, which is constantly reducing production. At one time, 2800 million cubic feet of gas were available from domestic gas fields daily. On November 17, 1952 million cubic feet were produced. Ten days ago, it was 1972 million.
Petrobangla estimates that the demand for gas in the country will exceed 4500 million in the 2026-27 fiscal year. Although some want to say that the actual demand for gas right now is about 4500. Although there are few alternatives to address the electricity shortage, many consider LNG import to be a dangerous option. Energy experts believe that today's tragic outcome is due to decades of stagnation in oil and gas exploration in the country.