The Financial Express

FSRUs still operate at half capacity

Non-completion of gas transmission pipelines blamed

| Updated: November 19, 2019 12:38:24

The specialised vessel ‘Excellence’ reaches Bangladesh on Aprril 24, 2018 carrying 136,000 cubic metres of LNG — Collected The specialised vessel ‘Excellence’ reaches Bangladesh on Aprril 24, 2018 carrying 136,000 cubic metres of LNG — Collected

Pipeline constraints are still pushing the country's overall import of LNG (liquefied natural gas) and its re-gasification almost half the total capacity.

State-run Petrobangla is currently re-gasifying around 550 million cubic feet per day (mmcfd) of LNG from two LNG import terminals, FSRUs, against their capacity to re-gasify around 1,000 mmcfd.

Petrobangla has deals with the terminal owners to pay around US$ 450,000 (Tk 38.25 million) per day for re-gasification of up to around 1,000 mmcfd of LNG, a senior Petrobangla official told the FE.

According to the deals, Petrobangla is required to pay the US's Excelerate Energy's FSRU (floating, storage, re-gasification unit) around $237,000 per day and Summit's FSRU around $ 217,000 per day.

It will have to pay the same amount to Excelerate Energy and Summit Group, no matter it re-gasifies the agreed quantity or less, he added.

Both the deals are on a take-or-pay basis that means Petrobangla will have to pay the aforesaid amount after commissioning of the FSRUs, no matter it re-gasifies or not.

Both the FSRUs are designed to re-gasify around 500 mmcfd, which is the agreed quantity between Petrobangla and contractor.

A senior official of state-run Gas Transmission Company Ltd (GTCL) said the existing pipeline infrastructure has a maximum capacity to supply around 650 mmcfd of re-gasified LNG (RLNG).

It will not be possible to supply additional RLNG from the FSRUs until the construction work of two necessary pipelines-a 90-km pipeline connecting Moheshkhali to Anwara and another 181-km pipeline connecting Chattogram, Feni and Bakhrabad-are completed, he added.

The GTCL is responsible for building gas transmission pipelines in the country.

The official, however, said the construction work of these pipelines is in progress and expressed the hope that the work will be completed within next several months.

Earlier, the delay in construction of a 30-kilometre 42-inch diameter Anwara-Fouzdarhat gas transmission pipeline forced Excelerate Energy to limit downward LNG re-gasification from its FSRU.

Petrobangla started re-gasifying around 100 mmcfd of LNG, which is one-fifth of the capacity, from the first LNG terminal from August 18, 2018.

It began commercial operation of the Excelerate Energy's FSRU on August 18, 2018 after importing first LNG with Excelerate's commissioning cargo on April 24, 2018.

The Excellence got connected to the subsea pipeline network on August 05, and commenced injecting first re-gasified LNG to the pipeline network on August 12.

Technical issues and rough sea during the June-August south-western monsoon kept it stranded off the south coast of Chattogram for months.

The country's second LNG import terminal started operation on April 29, 2019 doubling the total LNG re-gasification capacity to 1,000 mmcfd.

The Excelerate Energy's FSRU alone re-gasified around 533 mmcfd of LNG on April 28, 2019, the day before commissioning of the second FSRU, according to Petrobangla.

Petrobangla has been importing LNG under long-term deals at prices ranging from $8.0 per mmBtu (million British thermal unit) to $10 per mmBtu over the past one and a half years.

Two global suppliers-Qatar's QatarGas and Oman's Oman Trading International-are currently supplying LNG to Bangladesh.

People familiar with the market said LNG cargoes were trading below US$4.0 per mmBtu, in the spot market over the past several months due to a supply glut.

Indian Oil Corp bought a cargo for delivery in the second half of August from commodity trader Trafigura at $3.69 per mmBtu while China National Offshore Oil Corp purchased a cargo for delivery in early September from Vitol at $3.90 per mmBtu, they said.

Spot market for LNG was developed over the past several years with the glut of LNG output alongside the growth of emerging markets for LNG.

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