Proposal for 3rd LNG terminal sent back

Cabinet panel seeks further review

The Cabinet Committee on Government Purchase has returned the proposal for the country’s third floating LNG terminal in Moheshkhali, Cox’s Bazar by a Chinese state-owned company for further review.

At a virtual meeting chaired by Finance Minister Amir Khosru Mahmud Chowdhury on Tuesday, the proposal to establish the floating storage and regasification unit (FSRU) by China National Energy Engineering & Construction (CNEE) under the government-to-government (G2G) method was placed.

While the finance ministry’s statement said the proposal was withdrawn, an official of the power, energy and mineral resources ministry said the committee gave some observations regarding the proposal and asked for those to be addressed before bringing it back to the next meeting.

Earlier on September 30, Petrobangla asked the Rupantarita Prakritik Gas Company (RPGCL) to get CNEE’s feedback/opinion on the comments provided by the legislative and parliamentary affairs division before finalising the implementation agreement and terminal use agreement to be signed.

CNEE submitted the proposal on June 19 for the offshore LNG terminal under a build-own-operate model, with a base regasification capacity of 600 million cubic feet per day (mmcfd) and a peak capacity of 750 mmcfd.

A comparison by The Daily Star found large portions of the proposal closely mirror another proposal submitted just 38 days earlier by US-based company NS Energy Navigation, whose chief executive is the grandson of Brahmanbaria-4 MP Mushfiqur Rahman, also the chairman of the parliamentary standing committee on the finance ministry.

The similarities are so extensive that a project map in CNEE’s June 19 proposal still carries the name of the earlier proposer: “Proposed NS Energy FSRU”.

The total cost of the proposed project has been estimated at Tk 12,324 crore for a 15-year term or Tk 13,161 crore for a 20-year term.

Earlier on September 5, The Daily Star reported that the regasification service fee to CNEE would be 35-37 percent more than what the government pays to existing LNG terminals, although the government’s negotiation committee could not determine how much of the premium is justified.

Under the 15-year arrangement, CNEE will charge $3,42,000 per day for the FSRU.

At present, the daily fee for Excelerate Energy’s FSRU is $2,54,000 and Summit LNG terminal’s is $2,49,115.

It is also higher than the $3,00,000 daily fee agreed by Petrobangla in March 2024 for Summit’s proposed second FSRU at Moheshkhali with a capacity of 600 mmcfd and a 15-year tenure.

Petrobangla terminated the deal in October 2024 following the fall of the Awami League-led government, and Summit contested the termination in court. The matter is still pending.

CNEE’s solicited daily fee is even higher than the benchmark of $2,39,653 per day recommended in a 2025 feasibility study by RPGCL.

Despite the higher rate, the seven-member negotiation committee on August 30 recommended two options before the government: a 15-year deal at $3,42,000 a day or a 20-year deal at $3,29,000 a day.

The charge under a 15-year agreement will include $2,46,000 fixed fee, $59,000 operational fee and $37,000 port service fee.

The committee calculated the value of Petrobangla’s payment obligation for the 15-year option at $1.002 billion, equivalent to Tk 12,324 crore, at a 12 percent discount rate.