The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed an agreement with Excelerate Energy Bangladesh Ltd to fund the set up of Bangladesh's first liquefied natural gas (LNG) regasification terminal in Maheshkhali upazila, Cox's Bazar.
The signing ceremony was held on Tuesday at a hotel in Dhaka, attended by the prime minister’s Energy Adviser Tawfiq-e-Elahi Chowdhury, State Minister for Power, Energy and Mineral Resources Nasrul Hamid, Energy and Mineral Resources Division Secretary Nazimuddin Chowdhury, Petrobangla Chairman Abul Mansur Md Faizullah and Excelerate Energy Chief Financial Officer and Managing Director Nick Bedford.
The LNG regasification terminal is the first of its kind in Bangladesh and is expected to increase the supply of natural gas to the national grid by 20%, sufficient to generate 3,000MW of power.
The project is expected to be complete by the first half of 2018, at the estimated cost of $179.5 million.
Of the cost, $53.8 million will come from Excelerate Energy and the IFC as investments, and the rest will be paid through loans.
The loans will be provided by the IFC and several other financial organisations.
On July 18, 2016, the government signed two agreements to build Bangladesh’s first floating storage and regasification unit (FSRU) – popularly known as liquefied natural gas (LNG) processing terminal – a few kilometres offshore Maheshkhali Island.
One agreement, on the project implementation, was signed between Excelerate Energy Bangladesh Ltd (EEBL), a subsidiary of US-based LNG company Excelerate Energy, and the government's Energy and Mineral Resources Division. The other agreement, on terminal use, was signed between the EEBL and the state-owned Bangladesh Oil, Gas and Mineral Corporation – more commonly known as Petrobangla.
According to the deals, the terminal will be built on a built-own-operate-transfer basis and will process imported LNG into natural gas. When fully operational, the terminal will add 500mmcfd – million cubic feet per day – of natural gas to the national grid.
The project will have a transformational impact on Bangladesh's power sector by increasing supply of energy for power generation, promote growth and mitigate climate change impacts.