Petrobangla yesterday signed an initial agreement with India's energy company Petronet to set up an LNG re-gasification terminal on Kutubdia Island and a pipeline at an estimated cost of $950 million.
Prabhat Singh, managing director of Petronet LNG, India's biggest gas importer, and Syed Ashfaquzzaman, secretary of state-run Petrobangla, signed the memorandum of understanding at the Petrobangla office in Dhaka, the Indian High Commission in Dhaka said in a statement.
Harsh Vardhan Shringla, Indian high commissioner to Bangladesh, and Nazimuddin Chowdhury, energy secretary of Bangladesh, were also present.
The agreement aims to set up liquefied natural gas infrastructure, which includes a land-based LNG terminal and a pipeline to carry the re-gasified LNG.
The capacity of the terminal is expected to be 7.5 million tonnes a year, according to the statement.
The project will be completed in four years with a plan for future expansion and can also be used to supply LNG through small barges and LNG trucks to users still unconnected by the gas grid.
The project will bring both direct and indirect employment and will further enhance the economic development of Bangladesh.
“The implementation of the project will be the starting of a new era and bring long lasting benefit for the people of Bangladesh.”
Kutubdia Island has a natural harbour with good draft and a natural breakwater, idle for setting up LNG terminal.
Bangladesh is looking outside to ease its energy shortage largely caused by depleting domestic reserves and rising demand. Gas supply stands at about 2,700 MMCFD against the demand for 3,300 MMCFD.
Earlier in July, Petrobangla and US-based Excelerate Energy signed the final deals to set up Bangladesh's first LNG terminal, which will handle imported LNG and supply it to the national grid from early 2018. The terminal will be set up at Moheshkhali in the Bay of Bengal.
The LNG terminal, also called floating storage and re-gasification unit, will have the capacity to supply 500 MMCFD.
The government aims to set up four land-based LNG terminals and one or two floating storage and re-gasification units, as an additional 3,500 MMCFD of gas will be required in the coming years, especially for power generation and industrial purposes.