Bangladesh on 12 November approved a proposal from China National Energy Engineering and Construction Co Ltd (CNEE) to develop the country’s third floating liquefied natural gas (LNG) terminal. The facility will be built off Kutubjum in Moheshkhali, Cox’s Bazar, to expand import capacity as a persistent gas shortage affects power generation and industry.
How much capacity will the Moheshkhali LNG terminal add?
The proposed floating storage and regasification unit (FSRU) will receive LNG from carriers, store it and convert it back into gas for delivery to Bangladesh’s national transmission network. It will have a standard regasification capacity of 600 million cubic feet per day (mmcfd), with peak output of 750 mmcfd. CNEE’s proposal envisages operations starting in 2028.
Bangladesh’s two existing floating terminals, both at Moheshkhali, have a combined capacity of about 1,100 mmcfd. The third unit would raise that figure to 1,700 mmcfd at standard output, an increase of about 55 per cent. Combined capacity could reach 1,850 mmcfd when the new unit operates at peak output.
What are the proposed contract terms?
The Cabinet Committee on Government Purchase cleared the state-owned Chinese company’s proposal under a government-to-government arrangement. The proposal sets out two options, costing Tk 123.24 billion (Tk 12,324 crore) over 15 years or Tk 131.61 billion (Tk 13,161 crore) over 20 years. The committee had deferred the proposal in October to review its financial terms and approved it in November at the proposed cost.
Under the 15-year option, CNEE proposed a daily service fee of US$342,000. That is about 35 per cent above the fee for Excelerate Energy’s terminal and 37 per cent above the rate for Summit LNG’s facility. The purchase approval did not specify the final daily fee or the commissioning date.
Why is Bangladesh expanding its LNG import capacity?
Bangladesh requires about 3,800 mmcfd of gas, while domestic production and LNG imports typically supply around 2,700 mmcfd. The resulting shortfall of about 1,100 mmcfd has put pressure on power producers and industrial users. An outage at either of the two existing terminals can further disrupt supplies.
Excelerate Energy commissioned Bangladesh’s first LNG import terminal at Moheshkhali in 2018, and Summit’s facility followed in 2019. In October 2024, state-owned Petrobangla terminated a separate agreement with Summit Group for a third floating terminal, citing procurement concerns. Summit challenged the decision.
Bangladesh also advanced several LNG supply proposals on 12 November. The government cleared a short-term procurement arrangement involving Japan’s JERA Global Markets and gave in-principle approval for imports from suppliers in the United Arab Emirates and Nigeria. The purchase committee also approved two cargoes from Malaysia’s Petronas and three side letters covering 2027 deliveries from Oman’s OQ Trading.
FAQs
Who will develop Bangladesh’s third floating LNG terminal?
China National Energy Engineering and Construction Co Ltd will develop the project under a government-to-government arrangement.
Where will the new LNG terminal be located?
The facility will be built off Kutubjum in Moheshkhali, in Bangladesh’s Cox’s Bazar district.
When is the Moheshkhali terminal expected to start operations?
CNEE’s latest proposal targets 2028. The purchase approval did not specify a commissioning date.
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