Bangladesh will sign a 15-year deal with RasGas to import liquefied natural gas (LNG) starting in 2018 as the South Asian country turns to the supercooled fuel to fill a domestic supply gap for power generation, two officials told Reuters.
The deal will be signed on September 25 in Qatar, said Mohammad Quamruzzaman, managing director of the Rupantarita Prakritik Gas Co, a unit of state-owned oil firm Petrobangla.
Under the deal, RasGas will supply 1.8mn tonnes a year of LNG for the first five years and 2.5mn tonnes a year for the next 10 after that, the Petrobangla officials said.
The deal is Bangladesh’s first LNG import agreement and will help to cover the country’s domestic natural gas shortfall.
The contract with the world’s biggest LNG exporter underscores the rise of South Asia as a new market for the fuel.
The deal is for less gas than the 4mn tonnes a year Bangladesh agreed to take in a 2011 memorandum of understanding with RasGas.
In June, Rupantarita Prakritik Gas posted a notice on its website looking to shortlist suppliers of LNG spot cargoes starting in 2018.
“We have got a huge response...about 40 companies showed their interest to supply LNG,” Quamruzzaman said.
Bangladesh’s first floating storage and regasification unit (FSRU), supplied by Excelerate Energy of the US, is to be commissioned by April 2018. Its second, supplied by the country’s own Summit LNG of the Summit Group, is due for commissioning by next October.
Bangladesh is also looking to add two additional floating LNG terminals next year.
Bangladesh, a country of more than 160mn people, could import as much as 17.5mn tonnes of LNG a year by 2025, Nasrul Hamid, Bangladesh’s state minister for energy and power, told Reuters last month.
The country’s own gas reserves are depleting; at the same time it is seeking to almost double its power capacity to 24,000MW by 2021.
Bangladesh is planning to invest heavily in importing the fuel.
South Asia is emerging as a hotspot for LNG, with Pakistan and Bangladesh set to join India as major consumers.
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