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Bangladesh’s first LNG import terminal secures financing

Bangladesh’s first LNG import terminal secures financing

DHAKA: Bangladesh appears to be on track to begin importing LNG next year after this week’s announcement from the developer of the country’s first import terminal that project financing had been secured. Excelerate Energy said on July 11 that its partner in the development, World Bank unit IFC, had secured US$125.7 million in debt financing for the US$179.5 million Moheshkhali Floating LNG (FLNG) project. IFC will stump up US$32.8 million of the loan, while the rest will come from CDC Group, DEG, FMO and JICA.

The IFC has already bought a US$10.8 million equity interest in the project alongside Excelerate’s US$43.1 million stake. Construction work is slated to begin in the fourth quarter, with an existing Excelerate floating storage and regasification unit (FSRU) to be brought online by mid-2018. The unit, which will be located offshore Moheshkhali Island in the Bay of Bengal, will have 138,000 cubic metres of LNG storage capacity and a base regasification capacity of 500 mmcf (14.16 mcm) per day. The project will also see the installation of a subsea buoy system anchored offshore and the use of port service vessels during operation.

Bangladesh has for years been struggling with a gas supply shortfall that has hit its power and industrial sectors hard. The country produces around 2.7 bcf (76.46 mcm) per day of gas, while demand amounts to about 3.3 bcf (93.46 mcm) per day. Excelerate said that once the FSRU was installed it would allow state-owned Petrobangla to expand the country’s gas supply by up to 20% – enough to support up to 3,000 MW of power generation capacity. Of Bangladesh’s 13.3 GW of installed power generation capacity, a reported 63% relies on gas as a feedstock, while 22% depends on fuel oil and 8% on diesel.

Excelerate said the project represented the first fully integrated turnkey FLNG solution, with the company solely responsible for providing all services under a single contract. The head of IFC’s Asia-Pacific industry, infrastructure and natural resources division, Hyun-Chan Cho, said: “Addressing the issue of depleting gas supplies is critical for the country. We hope this first LNG import facility in Bangladesh will pave the way to expand support to the power sector and industry, promote growth and mitigate climate change impacts.” State-run Petrobangla has already signed preliminary deals for two more LNG terminals as well as a memorandum of understanding (MoU) with commodity trader AOT Energy on lining up deliveries.