Dhaka: State-owned Petrobangla on Thursday signed an agreement with Excelerate Energy Singapore Private Limited to set up a floating storage and re-gasification unit (FSRU) at Maheshkhali, Cox’s Bazar, to facilitate the supply of 500mmcf (million cubic feet) imported liquefied natural gas across the country.

Briefing reporters on the occasion, the energy adviser to prime minster, Tawfiq-e-Elahi Chowdhury, said the Singapore-based firm will set up the FSRU (LNG terminal) within the next 23 months on build-own-operate-transfer (BOOT) basis and operate it for the next 15 years.

The signing of the agreement is a follow-up step of the earlier signed ‘term sheet agreement’ on January 14 last year. Now, it needs another step to get into the final deal to make it fully operational.

Officials hope that the final deal with the Excelerate Energy Singapore Pte Ltd will be signed within the next two months and then the deal will be made effective for the start of the physical works for the project.

Excelerate Energy set up a special purpose company — Exelerate Energy Bangladesh Limited (EEBL) — for the execution of the project.

At the function, State Minister for Power and Energy Nasrul Hamid said that after construction, the LNG terminal will come into operation by first quarter of the 2018.

‘This project will boost gas supply to industries, especially the textile and garment industries, which are planning to increase export to $50 billion annually.’

He said Bangladesh has already signed memorandum of understanding (MoU) with Qatar to import LNG and supply it to the country through the FSRU. Apart from this, LNG will be imported from other foreign sources.

He said another two land-based LNG terminal will be set up in the country to import more gas to meet the country’s growing demand.

As per the contract, officials said, the Excelerate Energy will set up FSRU with a capacity of 1,38,000 cubic metre LNG and daily supply of 500mmcf gas to the gas network.

The company will charge 0.49 US cents per unit (million cubic feet) of gas for regasification and processing of the imported LNG.

Finally, each unit of gas will cost between $7-8 and the country will have to spend $1.6 billion annually to import, process and supply the gas to the country, said the Petrobangla officials.

Petrobangla director Qamruzzaman said Excelerate Energy will immediately start conducting geophysical and geotechnical survey in Moheshkhali area as part of the feasibility study of the project for avoiding any further delay although it takes two months’ time to sign a final deal with the company.

The government took up the project in 2010, but it took almost six years to select a company for the project.

Energy secretary Nazimuddin Chowdhury, Petrobangla chairman Istiaque Ahmad were present at the function.