Deal likely with US firm on LNG terminal

 An initial deal is likely to be signed between state-owned Petrobangla and US-based Excelerate Energy-Astra (EA) Consortium for the construction of an LNG terminal at Moheshkhali in Cox’s Bazar.

“Negotiations are on… we hope we’ll be able to reach a positive conclusion soon, and an initial deal may be signed with the US firm on Thursday,” Quamruzzaman, director (operation) of Petrobangla told UNB.

He dropped a hint that both sides have agreed on most issues. “Only a few issues are yet to be discussed,” he added.

The government has moved to set up the LNG (liquefied natural gas) Floating Storage and Regasification Unit (FSRU) in Moheshkhali Island with a view to meeting the growing energy demand through importing liquefied gas from abroad.

A memorandum of understanding (MoU) was also signed with Qatar a few years ago for the LNG import.

The government also received offers from international firms for the project and finally picked the Excelerate Energy-Astra (EA) Consortium for negotiation to set up the project on build-own-operate basis.

The representatives of the US firm arrived here on Monday and entered into a four-day negotiation with Petrobangla to reach a consensus on different technical and financial issues. Representatives of the National Board of Revenue (NBR) and some other ministries also took part in the negotiation on behalf of the government side.

Reports have it that both Petrobangla and Excelerate Energy-Astra (EA) Consortium have agreed on the re-gacification charge to be imposed by the LNG terminal operator.

Petrobangla sources said the US firm also agreed with Petrobangla’s condition that the LNG operator itself will have to mobilise international bank loans for the project while Petrobangla will extend its usual support.

The sources, however, said some issues related to the payment of value added tax (VAT) and duties still remained unresolved.  Petrobangla wants the US company to pay all the taxes and duties to the NBR as per the existing law. But the US firm preferred a tax exemption or it is paid by Petrobanbgla as it pays taxes of international oil companies.

“We hope, there’ll be no big problem to settle the tax-related issues as both sides are discussing with a positive outlook,” said a Petrobangla official who attended the meeting.

Officials said the LNG terminal has been planned to be set up in a location close to the Moheshkhali Island where the imported LNG will be unloaded from specialised ships and regassified in the terminal for distribution to clients through commercial supply network in the mainland. The government plans to put the terminal into operation by June 2016.

There will be an inbuilt pipeline system to bring the regassified LNG on the shore to supply it to the national gas network. The government is also implementing a 90-km pipeline to supply the LNG to Chittagong city.

Initially, about 500mmcf gas will be supplied through the LNG terminal. But it may later be expanded in phases with the rise in local demand and import.

The country’s gas supply from domestic sources currently stands at 2350 mmcf a day against a minimum demand for over 2700 mmcf per day.

Source: UNB Connect

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