Bangladesh seeks contractor to build first land-based LNG terminal

The government of Bangladesh has selected eight potential global companies, including ExxonMobil and TotalEnergies, as well as various Japanese players, to build the South Asian country’s first onshore liquefied natural gas (LNG) import terminal. Significantly, the proposed 7.5 million tonnes per year (t / y) LNG processing facility would double Bangladesh’s import capacity.

Eight potential entrepreneurs were selected to build the LNG terminal based on 12 expressions of interest. Contractors will now submit proposals before final award.

Selected companies include Japanese Mitsui & Co Ltd; Japan Investment Corporation for Matarbari Regas Terminal, a joint venture of Inpex Corporation, Sojitz Corporation, Kyushu Electric Power Co and Unique Hotel and Resorts Ltd; joint venture of Total Gas Electric Holdings and Total Gas and Power Business Service of France; Petronet LNG Ltd; joint venture of Qatar Petroleum LNG Services and ExxonMobil of Qatar; joint venture of Summit Corporation Ltd, Mitsubishi Corporation and Jera Co Inc and joint venture of United Enterprises & Co Ltd, Posco International Corp and Korea Gas Corporation and the consortium of Sumitomo Corporation and Chugoko Electric Power Co. Inc, reported The Financial Express.

The proposed land terminal agreement will be awarded on a build, own, operate and transfer basis. It will be located in the Matarbari business center, in the Cox’s Bazar district, near the Bay of Bengal. Under the contract, the winning company will own and operate the terminal for 20 years.

Japanese company Tokyo Gas is currently carrying out the feasibility study and preparing documents to help select the final bidder to build the LNG terminal, The Financial Express said.

“The Japanese company will also help the government evaluate the bid to select a suitable bidder,” the newspaper said, citing an official saying.

Bangladesh already has two 3.75 million t / y Regasification Floating Storage Units (FSRUs) and began importing LNG in 2018 to help meet growing demand for gas as domestic production declines.

Bangladesh imported 4.1 million tonnes of LNG in 2020, an annual increase of about 14.5%. Although Covid-19 has reduced demand for gas in the power and industrial sectors, the government has prioritized LNG imports and reduced domestic gas production, energy research firm Wood Mackenzie reported. However, the country’s LNG demand is expected to increase as the decline in domestic production results in a need for imports. Wood Mackenzie expects Bangladesh’s LNG demand to reach 21.2 million t / y by 2030 and 30.8 million t / y by 2040.

“The demand for gas will increase in all sectors as the country outperforms in all spheres of economic development, including industry and infrastructure. In the longer term, to accommodate additional LNG into the system, a new pipeline and additional regasification terminals are needed, ”said Wood Mackenzie in his latest report.

Global LNG suppliers, including producers such as Petronas, are eager to secure a forward contract with Bangladesh. The country currently has long-term LNG supply agreements with Qatargas and Oman Trading International (OTI).

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