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Work on the country’s biggest 718-MW capacity in LNG-fuelled combined cycle power plant gets momentum after roping the Japanese JERA in the project.
The project, owned jointly by JERA and India’s Reliance, is contractually bound to be commissioned by August 31, 2022, a senior Power Division official told the FE on Saturday.
The LNG (liquefied natural gas) import is expected to increase by an estimated 110-million cubic feet per day (mmcfd) with the commissioning of the power plant.
JERA struck a deal with Reliance Power Ltd to acquire a 49-per cent stake of the new gas-fired thermal plant on September 03, 2019.
The partnership agreement was made just two days after final contracts over its execution on September 01.
The under-construction plant at Meghnaghat in Narayanganj, some 40 kilometres southeast of Dhaka, is the first project participation by JERA in Bangladesh.
The Japanese firm currently holds 22-per cent stake with the overall Summit Power International.
The state-run Petrobangla has already increased the country’s LNG regasification capacity to 1.0 billion cubic feet per day through two operational FSRUs (floating storage, regasification unit).
It aims to meet the augmented natural gas demand for new consumers, including the fresh LNG power plants.
Titas Gas Transmission and Distribution Company Ltd, a subsidiary of Petrobangla, will supply regasified LNG to the power plant project.
Japan is arranging an estimated 69 billion yen ($644 million) in loans from public and private Japanese lenders, including Japan Bank for International Cooperation that will provide 28.5 billion yen.
Asian Development Bank, Japanese megabanks Mizuho Bank, Sumitomo Mitsui Banking Corp and MUFG Bank are also expected to supply funds.
Nippon Export and Investment Insurance, another Japanese government entity, will guarantee private-sector loans along with JERA’s stake in the project.
It will cover losses in the event of conflict or non-payment of power fees.
Bangladesh Power Development Board will purchase power from the plant for 22 years at a levelised tariff rate of 7.312 US cents (Tk 5.85) per kilowatt-hour with 82-per cent plant factor and 12-per cent discount factor as per the power purchase agreement.
Sources said Reliance Bangladesh LNG and Power Ltd, owned by Reliance Power Ltd, signed a memorandum of understanding during Narendra Modi’s visit to Dhaka five years back in June 2015.
Reliance had announced its plan to set up a 3,000-MW gas-fired power plant and a 500-mmcfd capacity LNG terminal in Bangladesh.
The import of LNG, use of required gas at the plant and sale of the remaining imported gas to the Bangladesh government were part of Reliance’s initial plan.
But as Bangladesh was moving then to arrange two FSRUs, Reliance’s proposal to build an FSRU along with large-scale power plants was shelved. Its latest proposal to build a 718-MW LNG-fuelled power plant got approval from Bangladesh’s cabinet committee on public purchase in May 2017.
Bangladesh now regasifies only 60 per cent of its capacity to the tune of around 600 mmcfd due to lower consumption for coronavirus, said Rupantarita Prakritik Gas Company Ltd managing director Md Kamruzzaman.
The outbreak of the superbug has shed the domestic demand as many gas-guzzling factories and industries are either shut or running at lower capacity, he added.
The US-based Excelerate Energy and local Summit Group are the owners of two 500-mmcfd capacity FSRUs each. QatarGas and Oman Trading International are supplying LNG to Bangladesh under long-term deals.
Bangladesh has also planned to initiate the import of LNG from spot market soon.
(FE)
