MoU signed for US$3 billion LNG-power project in Bangladesh
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Summit Power International has announced that its subsidiary Summit Corporation Limited has signed a Memorandum of Understanding (MoU) with Mitsubishi Corporation and its subsidiary Diamond Gas International to develop a LNG-to-Power project in Matarbari, Moheskhali, Bangladesh, which is expected to cost up to US$3 billion.
The signing of the MoU was witnessed by the Prime Minister Sheikh Hasina of Bangladesh and Singapore’s Minister for Trade and Industry Mr Lim Hng Kiang at the Bangladesh-Singapore Business Forum 2018.
Under the MoU, the parties agreed to develop an integrated liquefied natural gas (LNG) onshore receiving terminal with a regasification capacity of up to 1,500 million cubic feet per day, a gas turbine combined cycle power plant comprising two 1,200 MW units, the necessary high voltage transmission lines and the import of LNG.
Mr. Muhammed Aziz Khan, Chairman of SPI, commented:
“This MoU will help SPI support Bangladesh’s fast-growing energy, power and technology needs. It will be a strategic fit for SPI to leverage Mitsubishi’s LNG, and LNG-to-Power expertise as well as understanding of Moheskhali and Bangladesh’s power needs. The two groups are well-positioned to uniquely benefit from opportunities arising from the Bangladesh Government’s move to raise LNG imports to meet the country’s domestic natural gas shortfall and expand the country’s power generation capacity.”
The shortfall mentioned by Mr Khan is currently estimated to be 1 million tonnes per annum (MTPA) and expected to rise to 11 MTPA by 2030. Bangladesh may have to import as much as 17.5 million tonnes of LNG per annum by 2025, as its domestic gas reserves shrink and demand grows.
Efforts to combat the shortfall seem to be increasing. As reported on this platform, in February Indonesia’s PT Pertamina and the Bangladesh Power Development Board (BPDB) signed an MoU regarding another LNG-to-power project in the country. Pertamina will develop a 1400 MW combined cycle gas turbine power plant and a floating, storage and regasification unit. The location of the project has not been disclosed.
With an even larger capacity, this project has the potential to contribute significantly to closing Bangladesh's power gap, especially given Summit Power's control of the market. The company is the largest independent power producer in Bangladesh, representing approximately 21% of the private power market in 2017.
