A joint venture of Germany's Siemens and a state-run Bangladeshi company is going to set up LNG-based power plants in Patuakhali to produce 3,600 megawatts of electricity at an investment of more than $4 billion. North-West Power Generation Co Ltd, an enterprise of Bangladesh Power Development Board (BPDB), will sign a primary agreement with Siemens to this effect in Dhaka today, energy ministry officials said yesterday.
Twenty percent of the plant's cost will be in equity that will be borne equally by North-West and Siemens. Siemens will mobilise the rest of the funds, said State Minister for Energy Nasrul Hamid. “This will be the single largest German investment in Bangladesh,” he told The Daily Star. Three LNG-based power units will be set up under the joint venture, according to a source at the BPDB. The first one will go into operation in 2021. The government has taken an initiative to import a huge amount of LNG from next year. Both land-based and floating LNG terminals will be set up.
Japanese firm Tokyo Gas Engineering Solutions Corporation has been appointed as a consultant to carry out the feasibility study for setting up the land-based terminals. The sites being considered for the land-based terminals include Kutubdia, Moheshkhali and Payra. Each of the two land-based terminals will supply 1,000 million cubic feet of gas per day (mmcfd), according to an official of the energy ministry. Besides, the government has approved two floating LNG terminals, each of which will supply 500mmcfd of gas. Bangladesh is looking outside to alleviate its energy shortage largely caused by depleting domestic reserves and rising demand. Gas supply stands at about 2,700mmcfd against the demand for 3,300mmcfd. The shortage of gas has affected power generation.
In July, state-run Petrobangla and US-based Excelerate Energy signed the final deals to set up Bangladesh's first LNG terminal. The terminal in Moheshkhali will supply gas to the national grid from early 2018. The government also awarded Summit Group the work to set up the country's first floating LNG terminal, also in Moheshkhali. This one is due for commissioning by next October. China Huanqiu Contracting & Engineering has proposed to set up an LNG plant in Moheshkhali, while KOGAS-MGCB-KSBL Consortium wants to set up a land-based terminal in Sonadia. Singapore's Sembcorp Utilities submitted a proposal to set up a Gravifloat terminal and a storage tank in the deep sea.
Gravifloat technology allows LNG terminal to be fully built and completed at a shipyard and installed in shallow waters to facilitate direct loading. Petrobangla has also signed an initial agreement with India's energy company Petronet to set up an LNG re-gasification terminal on Kutubdia island and a pipeline at an estimated cost of $950 million. The government recently signed an agreement with Qatar to import LNG. Import of 1,000mmcfd gas will cost Bangladesh $3 billion a year. Still, the overall result is going to be positive as the import of 1,000mmcfd gas could help produce almost 5,000 megawatts of electricity, which is more than half of what the country produces today. Petrobangla estimates that the contribution of 1,000mmcfd gas to the economy will be equivalent to Tk 2760 billion or about $34 billion.