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The Financial Express

Growing lobbying prompts authorities to decide to conduct study on FSRU at Payra

| Updated: September 16, 2021 16:02:30


- File photo (Collected) - File photo (Collected)

The government will carry out a feasibility study before allowing any firm to build FSRU (floating, storage and re-gasification unit) at Payra in Patuakhali.

The Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources has decided to conduct the study amid growing lobbies from interested parties to build FSRUs at Payra to facilitate LNG (liquefied natural gas) and supply the re-gasified LNG to end-users.

The US-based Excelerate Energy, the local Summit Group, and the state-run North West Power Generation Company Ltd (NWPGCL) are among the interested firms, lobbying with the government high-ups to build FSRUs there.

Before building any FSRU at Payra, its economic and geographical aspects are required to be evaluated, a senior energy ministry official told the FE on Wednesday.

Draft of the Payra River is a major concern to build FSRUs and carry LNG cargo there, said the official.

The length of sub-sea pipeline, which is expected to connect FSRUs with the shore, is also a key issue for consideration.

If the length of a sub-sea pipeline is too long, building any FSRU at Payra might not be economically viable, he added.

Sources said all the three companies are now lobbying with the government high-ups to get permission to build the FSRUs, having the capacity to re-gasify around 3.75 million tonnes per year (MTPA), through unsolicited deals under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010. The law has provisions of bypassing tender and providing immunity to those involved with quick fix solutions.

Among the three firms, Excelerate and Summit had earlier attained the permission to build their first FSRUs at Moheshkhali and supply re-gasified LNG under the special law, as the state-run Petrobangla did not float any international tender to select contractors for the job.

Excelerate and Summit's two operational FSRUs have the capacity to re-gasify around 500 mmcfd of LNG each.

Petrobangla has not yet floated any tender to select contractors to build or install FSRUs at Payra, where Excelerate and Summit have proposed to build the floating LNG import terminals.

Professor M Shamsul Alam, energy adviser of the Consumers Association of Bangladesh (CAB), told the FE that the government should select engineering, procurement and construction (EPC) contractors instead of awarding firms to build more FSRUs, bypassing tenders. Petrobangla should have stakes in the future FSRUs or such type of infrastructure, he opined.

Bangladesh initiated importing LNG in August 2018. The country has a 15-year contract with Qatargas to import around 2.5 million tonnes of LNG per year. It has a similar contract with Oman Trading International (OTI) for 10 years.

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