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Tk 32b revolving fund soon to finance LNG import

Tk 32b revolving fund soon to finance LNG import

DHAKA: The government has moved to form a revolving fund worth Tk 32 billion to meet the initial import cost of liquefied natural gas (LNG) meant for catering to a growing energy demand. The money, equivalent to US$ 400 million, for this proposed fund is likely to come from the ‘Energy Security Fund’ earlier established to help finance future energy projects to avert energy shortfall, officials said. At present, over Tk 35 billion has accumulated in the Energy Security Fund from higher-rated fuel sales to the public.

Bangladesh plans to start LNG import by April 2018 to bring about a better energy mix against the backdrop of depleting domestic gas reserves. The country’s first LNG-import terminal, with a capacity of 3.75 million tonnes per year, is being developed by US-based Excelerate Energy and is expected to be commissioned in April 2018. A second terminal, which will also come with a capacity of 3.75 million tonnes a year, is being developed by Summit Group and is expected to be commissioned by end of 2018.

Both located on Moheshkhali Island in the Bay of Bengal, the two terminals are expected to add an additional 1,000 million cubic feet per day (MMCFD) to the national gas grid upon their completion. Besides, the government signed a Sales-Purchase Agreement (SPA) with RasGas of Qatar last month for procuring 2.5MTPA LNG initially. The SPA has already been sent to the Cabinet Committee on Government Purchase for approval. According to government estimates, around US$ 82 million would be required each month for LNG import in the country: US$ 75 million for actual shipment and an additional US$ 7 million for the regasification of the same.