The construction of the proposed third floating LNG terminal will be determined through an open tender process, while the fourth terminal's construction awaits a feasibility study, said Petrobangla Chairman Janendra Nath Sarkar.
"Feasibility study for the fourth terminal, proposed for the Payra region, will examine economic viability. The cost of constructing extensive pipelines and addressing navigability concerns will be significant. Before proceeding, we must evaluate whether the terminal can supply sufficient gas and remain economically feasible,” he said.
Currently, two floating LNG terminals operate in Bangladesh.
One is managed by Excelerate Energy, while the other is operated by Summit Group.
The previous Awami League government signed a contract with Summit Group under a special law to build the third (Maheshkhali) floating LNG terminal.
Similarly, in November 2023, the government signed a termsheet with the US-based Excelerate Energy to establish the fourth (Payra) terminal without a competitive bidding process.
The special powers law, however, was repealed, leading to the formal cancellation of the Excelerate Energy contract last week.
Excelerate Energy currently supplies 600 million cubic feet of gas daily from its Maheshkhali terminal under a contract signed with Petrobangla on 18 July 2016.
The company had planned to establish another terminal in Payra.
In another instance, the Awami League government signed a deal with Summit Group on 30 March 2023 without a tender.
On 6 December 2023, the Cabinet Committee on Government Purchase approved a draft agreement for the third floating LNG terminal at Maheshkhali.
According to the agreement, Summit Group was to receive a regasification charge of $3 lakh per day (equivalent to Tk3.31 crore at the exchange rate specified in the contract) for 15 years after the terminal became operational.
Over the terminal's 15-year lifespan, Summit Group would have received approximately Tk17,354 crore (calculated at Tk110 per USD).
However, Petrobangla cancelled this agreement in October, though Summit Group has threatened legal action.
Petrobangla sources indicate that gas sourced domestically is far cheaper than imported LNG.
Prices for local gas include Tk1 per cubic metre from Sylhet Gas Fields Limited, Tk1.25 from Bangladesh Gas Fields Company, and Tk4 from BAPEX.
When combined with gas purchased from multinational companies such as Chevron Bangladesh and Tullow, the average price reaches Tk6.07 per cubic metre.
Domestic fields currently supply approximately 2,000 million cubic feet of gas daily, while imported LNG adds around 900 million cubic feet.
The inclusion of imported LNG raises the average price from Tk6.06 to Tk24.38 per cubic metre.
During the 2023-24 fiscal year, LNG imported from the spot market cost Tk65 per cubic metre, rising to Tk71 by August 2024.
With domestic reserves depleting and production dwindling, dependence on LNG imports has grown.
Local production, once at 2,800 million cubic feet per day, dropped to 1,952 million cubic feet on 17 November, down from 1,972 million cubic feet just ten days earlier.
Petrobangla projects gas demand to exceed 4,500 million cubic feet daily by the 2026-27 fiscal year, though some experts estimate current demand to already be at that level.
While alternative solutions are limited, many experts view LNG imports as a precarious option.
Energy specialists attribute the current predicament to decades of stagnation in domestic oil and gas exploration.
