Japan’s Mitsubishi has agreed to acquire a 25% interest in Bangladesh’s Summit LNG import project, which includes a floating, storage and regasification unit, with the remaining 75% held by Summit Corporation, the Japanese LNG trader said in a statement late last week.
The acquisition is part of Japan’s wider plans to open new LNG demand centers in emerging Asian markets, and brings confidence to Bangladesh’s LNG ambitions, which have so far been beset by delays in the commissioning of the country’s first LNG terminal, operated by Excelerate Energy.
Summit LNG is set to install an FSRU located 6 km off the coast of Moheshkali Island in the Cox Bazar district of Chittagong in Bangladesh, where it will receive and regasify LNG procured by state-owned oil and energy entity Petrobangla.
Construction of the terminal commenced at the end of 2017 and commercial operations are expected to start in March 2019, with a planned LNG import volume of approximately 3.5 million mt/year.
FIRST LNG REACHES CONSUMERS
Bangladesh’s customers received first regasified LNG from the FSRU Excellence, Bangladesh’s first LNG terminal, August 18, Petrobangla chairman Abul Mansur Md Faizullah told S&P Global Platts Monday.
Excelerate Energy docked and connected the FSRU to the subsea pipeline network August 5, and commenced injecting the gas August 12, S&P Global Platts reported last week.
The vessel, carrying 136,000 cu m of lean LNG from Qatar, arrived at the Moheshkhali Island terminal April 24, according to Platts trade flow software cFlow, and was due to start delivering the LNG from May 7, but technical issues and rough seas kept it stranded off the south coast of Chittagong for more than three months.
More constrains lie ahead, however, as the current pipeline infrastructure only has capacity for around 250 MMcf/day, half of the 3.75 million mt/year LNG project’s regasification capacity.
The FSRU is supplying around 75,000 – 100,000 Mcf/day of re-gasified LNG, which will be gradually increased to around 300,000 Mcf/day by early October, state-owned Karnaphuli Gas Distribution Company, which supplies the key consuming region of Chittagong, managing director Khaiz Ahmed Mozumder said.
Despite logistical and commercial challenges, Bangladesh is set to become a key LNG importer in the coming years, with Platts Analytics forecasting the country’s LNG demand to exceed 10 million mt/year by 2023.
LNG demand growth will be driven by growing consumption, supported by an expanding population, and an annual economic growth rate of more than 6%, as well as dwindling domestic reserves and a healthy pipeline of LNG import and gas distribution projects.