The Financial Express

Petrobangla signs MOU with Indian H-Energy to import R-LNG

| Updated: June 22, 2021 20:08:50

Petrobangla signs MOU with Indian H-Energy to import R-LNG

State-run Petrobangla has inked a memorandum of understanding (MOU) with Indian H-Energy recently to import re-gasified LNG (R-LNG) through a cross-border pipeline.

This is Petrobangla’s second MOU with Indian firms to import the expensive R-LNG through cross-country pipeline, a senior Petrobangla official told the FE.

Earlier it inked a similar agreement with India’s state-owned Indian Oil Corporation Ltd (IOCL) to import R-LNG.

When contacted, Petrobangla Chairman ABM Abdul Fattah refused to talk with the FE about the terms of the MOU.

Both the Indian firms have planned to export R-LNG to Bangladesh after importing the expensive fuel from a third country.

Petrobangla might have to bear the pipeline laying cost, wheeling charge to carry the R-LNG in addition to the import price of LNG, once it starts importing R-LNG from the Indian firms.

Sources said, both the IOCL and H-Energy are keen to supply R-LNG to Bangladesh’s south-western Khulna region to run gas-guzzling industries especially the power plants.

The proposed 800 megawatt (MW) gas-fired combined cycle power plant at Rupsha in Khulna region will be the major consumer of the imported R-LNG.

Bangladesh never imported R-LNG.

The IOCL and H-Energy earlier held several rounds of discussions over the past several years with the NWPGCL to supply R-LNG to the Rupsha power plant.

As per the initial discussions, the IOCL was keen to supply around 200 million cubic feet per day (mmcfd) equivalent of R-LNG from a 5.0 million tonnes per year (MPTA) capacity Dhamra LNG terminal of Indian Odisha state.

The H-Energy was keen to supply initially around 125 mmcfd of R-LNG, which it said could be increased to 500 mmcfd and 1.0 billion cubic feet per day (bcfd) from its 8.0 MPTA capacity LNG terminal at Digha of West Bengal.

The NWPGCL’s 800 MW power plant will require around 130 mmcfd of RLNG to generate electricity.

The remaining gas could be supplied to the natural gas grid for consumption by other gas-guzzling consumers including industries and power plants.

Construction of a total of 118 kilometre-long pipeline from Kolkata-Benapole (72 km) and from Benapole-Jessore (46 km) will be required to pump the LNG from India into Bangladesh's national gas grid.

Several multilateral donors have agreed to provide a record US$800 million in loan to implement the power plant.

Of the total lending, the Asian Development Bank (ADB) will provide $600 million and Islamic Development Bank (IDB) would give $200 million for the plant.

The power plant would have two gas-fired units, each having 400 MW capacity to run on imported R-LNG.

The government would provide the remaining $150 million for its implementation.

Currently, Petrobangla has been importing lean LNG from Qatar's QatarGas and Oman's Oman Trading International (OTI) and re-gasifying LNG in two privately owned floating LNG terminals at Moheshkhali Island in the Bay of Bengal since August 2018.

Petrobangla has also been importing LNG from spot market September 2020.

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