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Dhaka Thursday,  Mar 28, 2024

Finally The LNG Supply Started On Experimental Basis

EB Report

Bangladesh entered a new era in the energy sector when it received its first consignment of liquefied natural gas (LNG) in the gridline on Sunday. Petrobangla chairman Abul Mansur Md Faizullah told that after missing several deadlines, the first consignment of LNG was finally shipped to the gridline on Sunday. “This, was, however done on a test basis. After we conduct some tests, commercial operations with shipped LNG will start,” explained the Petrobangla chairman.

A Petrobangla official said they only require some earth bonding and safety signage to start the commercial operations. Earth bonding refers to electrical bonding of fuel gas piping systems to the electrical grounding system. Safety signage refers to the installations of safety signs across the facility of the state-owned Gas Transmission Company Ltd (GTCL), where the LNG is received.

The LNG consignment from the floating storage and regasification unit (FSRU), operated by Excelerate Energy Bangladesh Ltd, was supplied to the gridline in Chattagram’s Anwara from Maheshkhali, where the company, a subsidiary of the US-based Excelerate Energy, has built the first LNG terminal of the country.

An FSRU is a special type of ship used to store and degasify the LNG and supply it onshore. The FSRU in Bangladesh has a capacity to hold 138,000 cubic metres and distribute up to 500 million cubic feet per day, officials said.

The ships carrying LNG to Bangladesh will transfer the consignments to this FSRU, which will supply it to the terminal after regasification.

Earlier, the first consignment of LNG into the gridline was supposed to come in May, but the vessel had not been properly connected to the receiving pipeline. During an inspection of the facility, Excelerate discovered that the pipeline end manifold (PLEM) had not been connected properly to the gas grid’s main transmission pipeline. The pipeline connecting the Excellence FSRU to the shore is 7 km long.

Any fault or error in connecting the PLEM to the main pipeline could cause serious accidents and long-term suspension of gas supplies, explained the official of Petrobangla.

Petrobangla signed a terminal use agreement with Excelerate Energy Bangladesh Ltd to set up the country’s first LNG terminal on March 31, 2016. As per the agreement, the company was supposed to facilitate supplies of LNG to the shore.

The country’s first FSRU is being established on the build-own-operate-and-transfer (BOOT) basis. Also, the operator will be exempt from tax payments on the income from the project.

The company that will set up the FSRU, however, will have to maintain its accounts properly and submit returns regularly, said the National Board of Revenue (NBR), in a notification on October 30. Under the contract, Excelerate Energy will hand over the terminal to Petrobangla after 15 years of operations.

The Awami League (AL) initiated the LNG terminal project in Moheshkhali when it returned to power in 2009. It could not implement the project on account of different complexities in the first term. After the party formed the government for the second consecutive term in 2014, it placed it among its priority projects.

According to Petrobangla, yesterday (Monday), 2,577mcf gas were supplied against a demand for around 3,700mcf. The government has to limit the supplies despite growing demand on the part of industries and households as there is a lack of extraction from the gasfields.

Considering the situation, the Energy and Mineral Resources Division has decided to start importing LNG from Qatar, with the first shipment of the fuel arriving at Moheshkhali on April 24. According to the sources, the average gas supply cost per cubic meter is now calculated at Tk. 7.21 per cubic metre. Once the imported LNG is blended with the local gas, the supply cost will go up to Tk. 18 to 19 per cubic metre.

The gas companies recently proposed hiking the prices for the fertiliser sector by 372 per cent and for the power sector by 206 per cent. If these proposals are accepted, fertiliser as well as power prices will skyrocket. Once the prices are increased—as proposed for each unit of gas for the power sector—the electricity price, which now stands at Tk. 3.16, will spurt to Tk. 10. Again, the price per unit for the fertiliser sector will jump to Tk. 12.80 from Tk. 2.71.

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