Indonesia’s state-owned diversified energy company PT Pertamina and Bangladesh Power Development Board (BPDB) have signed a memorandum of understanding (MoU) to develop an integrated gas project, comprising of a combined cycle gas turbine (CCGT) power plant with installed capacity of 1400 MW and a floating, storage and regasification unit (FSRU). The estimated total investment is US$2 billion.
The signing of the MoU was witnessed by the Indonesian President Joko Widodo and Bangladesh Prime Minister Sheikh Hasina. President Widodo was in Bangladesh as part of his State Visit to South Asian nations.
In addition to the gas power plant and FSRU, the project will deliver mooring and off-loading infrastructure as well as subsea and onshore gas pipelines. The MoU stipulates that Pertamina will develop the FSRU and supporting facilities, and export the LNG to Bangladesh.
The construction of the project is scheduled to start in 2019 and projected to take three years.
A key aim of the project is to combat Bangladesh's gas deficit, currently approximately 1 million tonnes per annum (MTPA) and expected to rise to 11 mtpa by 2030. The country 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.
The effort to combat the deficit has been evident in a number of milestone developments in LNG projects in Bangladesh this past year. In May 2017 the IFC announced financing for the country's first LNG import terminal. As reported on this platform, the US179.4 million project will be co-developed by the IFC and Excelerate Energy Ltd.
Financing was also secured for a 750 MW combined cycle power plant to be built in Meghnaghat, 40km south-east of Dhaka. The Asian Development Bank announced a US$583 million debt financing package for the project in December. The plant is being developed by India's Reliance Power.