Bangladesh’s Petrobangla seeks $1.4 billion government funding for LNG imports
Petrobangla has sought $1.4 billion from the government to foot LNG imports in 2018, which was around 77.77% of the estimated total cost of importing, LNG cell chief Mohammed Quamrumman said Tuesday. “We sought the funding from the government as subsidy as we would not be able to realize the LNG import costs through sales to consumers in the domestic market,” he said. The domestic price of gas is $2.50-3/Mcf, which is much lower than international levels, Quamrumman said. Petrobangla has estimated the total cost of LNG imports at around $1.8 billion/year from 2018 when Bangladesh’s first floating storage and regasification unit that is being developed by US-based Excelerate at Maheshkhali island in the Bay of Bengal, is expected to be ready. The FSRU will have an initial handling capacity of around 500,000 Mcf/d and ultimately up to 700,000 Mcf/d of LNG. Petrobangla planned to start importing around 500,000 Mcf/d of LNG from next year to cater to rising domestic demand, Quamrumman said. It expects to get around $400 million/year through domestic sales of regasified LNG. The proposal was now pending approval by the Ministry of Finance, Quamrumman said. In December, officials said that Bangladesh was set to announce the selection of India’s Reliance Power to build a 500,000 Mcf/d FSRU at Maheshkhali island. Petrobangla has also signed a contract with Summit LNG Terminal Company Pte. Ltd. for a second FSRU at Maheshkhali. It signed a memorandum of understanding last year with India’s Petronet to build an onshore LNG import terminal at Kutubdia island with the capacity to handle around 5 million mt/year of imported LNG.
Saudi Aramco to buy $7 billion stake in Petronas’ RAPID refinery project
The deal signing was witnessed by Malaysian Prime Minister Najib Razak and Saudi King Salman, currently on a state visit to Malaysia – the first in over a decade. “Malaysia offers tremendous growth opportunities and today’s agreement further strengthens Saudi Aramco’s position as the leading supplier of petroleum feedstock to Malaysia and Southeast Asia,” Aramco Chief Executive Officer Amin Nasser said. “With RAPID’s strategic location in a prolific hub, it would also serve to enhance energy security in the Asia-Pacific region.” Petronas’ Chief Executive Officer Wan Zulkiflee Wan Ariffin told reporters Aramco will take a 50 percent stake in RAPID’s refinery and cracker project. Aramco will supply up to 70 percent of the crude feedstock requirement of the refinery, with natural gas, power and other utilities to be supplied by Petronas. “To my knowledge, it is the largest single downstream investment made by Saudi Aramco outside the kingdom,” said Sadad al-Husseini, a former Aramco executive. RAPID, part of the Pengerang Integrated Complex (PIC) in the southern Malaysian state of Johor, will contain a 300,000 barrel-per-day oil refinery and a petrochemical complex with a production capacity of 7.7 million metric tonnes. The total development cost has been estimated at $27 billion. Like neighboring Singapore, Malaysia’s Pengerang peninsula sits between the Malacca Strait and the South China Sea, through which almost all the Middle East oil and gas bound for northern Asia’s industrial powerhouses of China, Japan and South Korea is shipped. Petronas on Tuesday said almost 60 percent of the PIC development is complete, and that it is on track for refinery start-up in 2019. Petronas CEO Wan Zulkiflee said the idea for a partnership on RAPID was first mooted in 2014 when he met the then Aramco Chief Executive Khalid al-Falih, now the Saudi energy minister, in Geneva. Sources had told Reuters in January that Aramco had pulled back from a planned partnership with Petronas on RAPID over concerns about returns from the project. But the deal was back on within a month in time for King Salman’s visit to Malaysia. “We started negotiations three years ago. There was not any plans to break out of the agreement… From the beginning we came with the intention to stay,” Aramco CEO Nasser said on Tuesday. The Aramco investment comes as a relief for Petronas which has cut expenditures in the past year as oil prices have slumped from over $100 a barrel in 2014. In early 2016, Petronas said it would cut spending by up to 50 billion ringgit ($11.27 billion) over the next four years. Dividends to the government coffers have also been slashed. Saudi Energy Minister Falih echoed Nasser’s comments, saying Saudi Arabia would use the Malaysian investment as a platform to other investments in southeast Asia. “We will encourage the private sector of Saudi Arabia to come and look at Malaysia as an investment for its own market and also to address the needs for the broader region,” he said. Jaromir Jagr Jersey