Dhaka — Bangladesh has shelved plans for three small-scale floating storage and re-gasification units following objections from the country’s main port authority, and as LNG imports at its first full-sized FSRU ramp up. The cancellation comes as a disappointment for the commodity traders and shipping companies who were in talks with state-run national oil company Petrobangla for building the small-scale LNG projects or supplying gas to them.
The relatively high cost of small-scale LNG projects, the cost of gas supplies from these terminals and delays from interested sponsors, contributed to the shelving of the project by the energy ministry, according to industry executives. “We are not considering these small FSRUs now as the previously planned floating LNG terminal has already been commissioned, and is supplying re-gasified LNG to consumers,” Petrobangla’s chairman Abul Mansur Md Faizullah told S&P Global Platts Tuesday.
Faizullah said commodity traders Trafigura, Gunvor and Vitol, as well as Belgium-based shipping company Exmar NV were in final talks with Petrobangla and its subsidiary, Rupantarita Prakritik Gas Company Ltd, to build the mini FSRUs and sell the gas to Petrobangla. RPGCL is in charge of monitoring LNG imports and its facilities in Bangladesh. In December last year, Petrobangla had inked preliminary agreements with Trafigura and Gunvor for the supply of around 200,000 Mcf/day of regasified-LNG each for over 10 years.
In early May, Petrobangla abandoned the preliminary deal with Trafigura due to delays in agreeing to the terms of the SPA, including the LNG specification and the location for any potential dispute settlement, Platts reported previously. A preliminary deal with Gunvor also did not progress further. “We don’t have any binding agreement with any of these firms to award contracts to build small FSRUs and supply re-gasified LNG to us,” Faizullah clarified.
The small-scale FSRUs were meant to supply gas ahead of the commissioning of Excelerate Energy’s Moheshkhali FSRU in the Bay of Bengal, and the end-users of natural gas from both projects are the same in the port city of Chattogram, according to Petrobangla. PORT CONSTRAINTS The Chittagong Port Authority has warned that the navigability of the adjacent River Karnaphuli might be badly affected if the small FSRUs were docked there, a senior official at the country’s energy ministry said this week.
The official added that Bangladesh’s energy ministry was planning to build mini FSRUs with a capacity of around 150-200 MMcf/d of natural gas each, adjacent to an existing platform and jetties on the River Karnaphuli. “We sent our observations over building of the FSRUs to the concerned authorities,” Chittagong Port Authority’s member for administration and planning Md Zafor Alam said Monday.
Chittagong Port is Bangladesh’s largest sea port that handles 90% of the country’s trade and is also used by India, Nepal and Bhutan for transshipment, according to CPA statistics. It ranked as the 71st busiest port in the world in 2017, according Lloyd’s List of London. State-run Petrobangla started LNG imports from Qatar’s RasGas from September 9 via Excelerate Energy’s FSRU Excellence, which is Bangladesh’s first LNG import facility, located at Moheshkhali Island in the Bay of Bengal.