Bangladesh completes first pipeline for regasified LNG, plans 3 more

[Banglar Bir]

Bangladesh completes first pipeline for regasified LNG, plans 3 more
SAM Staff, August 15, 2017

Bangladesh has completed construction of its first dedicated pipeline to move regasified LNG to end-users and has three more in the works, state-run Gas Transmission Company Ltd managing director Md Atiquzzaman said Monday.

The 91 km (56 mile) 30-inch natural gas pipeline from Moheshkhali to Anowara, with a capacity of up to 800,000 Mcf/d, has been completed and undergone the necessary testing, he said.

A parallel 79 km 42-inch pipeline is currently under construction to carry additional volumes of imported regasified LNG from Moheshkhali to Anowara, which is due for completion in 2018, he said.

Atiquzzaman said construction of another 30-km 40-inch pipeline is under way to carry imported regasified LNG from Anowara to Fouzdarhat and supply it to end-users in the port city Chittagong. Another 181 km 36-inch Chittagong-Feni-Bakhrabad gas transmission pipeline would also be laid down soon to distribute supply across the country from Chittagong, he added.

GTCL, a wholly owned subsidiary of state-owned Petrobangla, is responsible for building and maintaining the country’s gas pipelines.

Bangladesh eyes starting LNG imports in early 2018 and is making concerted efforts to move forward with LNG import infrastructure.

The country’s first LNG import terminal, a 3.75 million mt/year FSRU being developed by US-based Excelerate Energy, is expected to be commissioned in April 2018 and its second, also with a capacity of 3.75 million mt/year, being developed by Summit Group, is expected to be commissioned by end 2018.

Both will be located at Moheshkhali Island in the Bay of Bengal, with ownership to be transferred to Petrobangla after 15 years of operations.

Petrobangla is also planning to set up at least two onshore LNG terminals, each with a capacity of 7.5 million mt/year, by 2025.

Petrobangla on July 13 inked its first ever deal with Qatar’s RasGas to import 2.5 million mt/year of lean LNG for 15 years, S&P Global Platts reported earlier.

Separately, Petrobangla has signed an MOU with Switzerland-based AOT Energy on LNG, with an SPA due to be signed by year end. It also recently issued an international tender seeking expressions of interest to supply LNG on a spot basis, which closes August 17.

Although Petrobangla’s contract with RasGas will be priced against international crude benchmarks, Petrobangla is counting on government subsidies to enable it to pay for the imported LNG. Earlier this year, the company requested a subsidy of $1.4 billion from the government to foot its LNG import bill for 2018 — some 78% of the total estimated cost.

Subsidies will be aimed at bridging the wide gap between international LNG prices and domestic gas prices. Demand for natural gas, which accounts for more than 70% of Bangladesh’s energy fuel consumption, is expected to continue growing steadily to close to 7 Bcf/d by 2040, according to Petrobangla, while production is expected to peak above 3.5 Bcf/d by 2023.

SOURCE S&P GLOBAL PLATTS
http://southasianmonitor.com/2017/08/15/bangladesh-completes-first-pipeline-regasified-lng-plans-3/

 

[bluesky]

Bangladesh completes first pipeline for regasified LNG, plans 3 more
SAM Staff, August 15, 2017

Bangladesh has completed construction of its first dedicated pipeline to move regasified LNG to end-users and has three more in the works, state-run Gas Transmission Company Ltd managing director Md Atiquzzaman said Monday.

The 91 km (56 mile) 30-inch natural gas pipeline from Moheshkhali to Anowara, with a capacity of up to 800,000 Mcf/d, has been completed and undergone the necessary testing, he said.

A parallel 79 km 42-inch pipeline is currently under construction to carry additional volumes of imported regasified LNG from Moheshkhali to Anowara, which is due for completion in 2018, he said.

Atiquzzaman said construction of another 30-km 40-inch pipeline is under way to carry imported regasified LNG from Anowara to Fouzdarhat and supply it to end-users in the port city Chittagong. Another 181 km 36-inch Chittagong-Feni-Bakhrabad gas transmission pipeline would also be laid down soon to distribute supply across the country from Chittagong, he added.

GTCL, a wholly owned subsidiary of state-owned Petrobangla, is responsible for building and maintaining the country’s gas pipelines.

Bangladesh eyes starting LNG imports in early 2018 and is making concerted efforts to move forward with LNG import infrastructure.

The country’s first LNG import terminal, a 3.75 million mt/year FSRU being developed by US-based Excelerate Energy, is expected to be commissioned in April 2018 and its second, also with a capacity of 3.75 million mt/year, being developed by Summit Group, is expected to be commissioned by end 2018.

I am rather surprised at the fast pace of this job of three pipeline construction works when the LNG project itself has not been constructed yet. I hope that the 30 km last leg of pipeline from Anowara to Faujdarhat will already be completed by the time the LNG re-gasification plant has been commissioned.

 

[Banglar Bir]

The LNG scam?
Ikram Sehgal, August 25, 2017

Vide their milestone judgment SCMR773 in 2012 the Supreme Court of Pakistan (SC) cancelled all the contracts of Rental Power Plants (RPPs). From Bhikki and Sharaqpur up to Piranghaib, Naudero – 1 and Naudero – 2, they were all declared illegal ab initio and void being in contravention of laws/PPRA rules. Besides suffering from other irregularities, the RPPs were in violation of the principle of transparency, fair and open competition. The Court found the competent office willfully failed to exercise their authority to prevent the grant or rendition of undue benefit and favor.

The cost of electricity being produced on the higher side and not commensurate with the provisions of Section 7 of the Act 1997, Bhikki and Sharaqpur were paid exorbitant rates in billions of rupees. The down payment being increased from 7% to 14% after the award of contract, the Court further decreed that all those in charge of giving decisions violated the principle of transparency under Article 9 and 24 of the Constitution and Section 7 of the Act 1997. Their involvement in getting financial benefits by indulging in corruption and corrupt practices could not be over-ruled and hence they are liable to be dealt under NAO 1999 by the NAB.

The Summary for the first LNG Terminal at Port Qasim was stayed by the Ministry of Petroleum and National Resources in May 2013 while under process for reasons of short remaining tenure of the PPP Govt. The Nawaz Sharif regime moved the case for 200 mmcft with an estimated cost of US$ 30 to 40 Million for construction of First LNG Terminal at Port Qasim Karachi with specific directions to award the contract to M/s Engro. To follow the PPRA Rules for purpose of fair play, transparency and merit, the Summary was turned down by the Cabinet Division in the Prime Minister’s Secretariat. The Ministry then hired a US based Consultant M/S QUED for technical and financial feasibility of the project. Bids were reportedly called with the Consultant Report still in a draft form.

Two companies namely M/S Pak Gas Port and M/S Engro participated in the bidding process, M/S Pak Gas Port was disqualified on technical basis. PPRA rules permit procurement authority to disqualify any firm without citing any reasons for not fulfilling technical criteria. However when the aggrieved firm requests the rationale, the authority is bound to provide the technical reasons. The PPRA rules allows award of contract even to a single bidder if all legal formalities are completed. Therefore, according to PPRA, M/S Engro winning the contract appears to be on merit.

The LNG at minus 149O C converted into a solid state is transported to terminal, gasified and put into the system for consumption. OGRA allows the UFC (Un-accounted for Gas Losses similar to line losses in case of electricity) from 4 to 7% for a normal gas but for some unknown reason that defies logic, Engro has been permitted 19% UFG. The OGRA authorities can perhaps comment on the technical reasons why such phenomenal Gas Losses margin (tripled) was allowed and why M/S Engro is enjoying such latitude?

The primary entity responsibility for gas related project handling in the South, the Sui Southern Gas Company (SSGC) were kept out of the loop. MD SSGC resigned when asked to fulfill legal obligations of signing the contract documents by the Ministry. At the tender awarding phase after award of contract, a corrigendum was issued for award of capacity charges to M/s Engro at the rate of Rs two crore seventy two lacs (27.2 million) per day for the first year and Rs two crore twenty eight lacs (22.8 million) per day for next fourteen years. Why was such an important clause missed out in contract documents or was kept to be negotiated later with the bidder needs explanation. This is a clear cut violation of PPRA Rules. With SSGC subsequently brushed aside, Pakistan State Oil (PSO), basically a liquid petroleum products handler, was entrusted to look after import of LNG. The Chief Operating Officer (COO) of M/s Engro was appointed as MD PSO with a salary package close to Rs 8m/month.

M/s Engro estimated the investment for construction of LNG Terminal to be approximately Rs 4 Billion. Leaving aside the UFG margin benefit, SSGCL till 30 June has paid Rs 24 Billion to M/s Engro under the head of capacity charges. For contracted period of fifteen years M/s Engro will receive approximately Rs 200 billion. Capacity charges contracted with M/s Engro are a fixed rental to be paid whether plant is in operational or in idling position. The follow up sub-contract between M/s Engro and Port Qasim for CNG handling, where four hauling tugs have been hired at the idling rate of US $ 8500 per tug per day also appears to be a disproportionate proposition which needs probing (Fixed 750000 US $ per month approximately).

Furnace Oil cost is presently US$ 5 per btu, India and Bangladesh contracted LNG between US$ 4 to 5 per btu whereas a deal was made in 2016 at US$ 9 per btu for Pakistan. What were the prevailing market dynamics and compulsions to make a deal costlier than furnace oil averages and at hundred percent higher rates compared to the deals made by our neighbors? The violation cited in SCMR 773 in RPP case by the SC were abuse of ‘value for money principle of PPRA’, not providing even and equal grounds to potential contenders, non-transparent processing, failing to exercise authority in preventing loss to the State exchequer, exorbitant payments not commensurate with market estimates and jacking up of mobilization money from 7 to 15% after award of the contract.

When compared with the RPPs the LNG Terminal award of contract attracts violations of almost similar nature of not preventing loss to the State by using office authority, issuance of corrigendum after award of contract, exorbitant rates both for UFG, purchase of LNG and capacity charges. Based on similar allegations NAB has been enquiring since almost one year without moving forward for reasons best known to NAB. Various beneficiaries must be restricted to just legal and acceptable bounds of the flow of money from the state exchequer before the losses being incurred gets beyond cost-benefit ratio of the total contract.

Somebody somewhere is making money, and a lot of it. Coincidence that it is the Qatari Connection again? If it is indeed a scam as the facts seem to suggest, the Superior Judiciary needs to take suo moto notice of this highway robbery

(The writer is a defence and security analyst).
http://southasianmonitor.com/2017/08/25/the-lng-scam/

 

[Homo Sapiens]

New update on this section of OP

Another 181 km 36-inch Chittagong-Feni-Bakhrabad gas transmission pipeline would also be laid down soon to distribute supply across the country from Chittagong, he added.

http://www.thedailystar.net/business
12:00 AM, January 25, 2018 / LAST MODIFIED: 12:47 AM, January 25, 2018
Bidders selected to build 181km LNG pipeline

Star Business Report
The government yesterday picked the lowest bidders for building a 181-kilometre gas transmission pipeline in order to facilitate imports of liquefied natural gas (LNG) from April this year.

The cabinet committee on purchase approved the bidders for the Chittagong-Feni-Bakhrabad pipeline.

The bidders are -- a joint venture of Arc Construction Company & Cathweld Construction; GasMin Ltd; a joint venture of Pipeliners Ltd and Business King Ltd; Bangladesh Foundry & Engineering Works; a joint venture of Technic Construction Company Ltd and Royal Utilisation Services; Dipon Gas Company Ltd; and Libra Enterprise. They will set up the eight sections of the pipeline at a combined cost of Tk 346.54 crore.

The government has taken initiatives to import a huge amount of LNG to tackle a growing energy shortage largely caused by depleting domestic reserves and rising demand of gas.
http://www.thedailystar.net/business/bidders-selected-build-181km-lng-pipeline-1524847

Another 181 km 36-inch Chittagong-Feni-Bakhrabad gas transmission pipeline would also be laid down soon to distribute supply across the country from Chittagong, he added.

It signed an agreement with Excelerate Energy, Singapore to set up a floating LNG terminal with a capacity of processing 500 million cubic feet of gas per day in Moheshkhali of Cox's Bazar. The LNG will be added to the national network by April.

The government also awarded Summit Group the work to set up another floating LNG terminal with the same capacity in Moheshkhali. This one is due for commissioning in October.

Three projects have been undertaken to set up a total of 290 kilometres of transmission pipeline to import a total of 2,000 mmcfd of gas.

The cabinet committee also approved a proposal to import about 10.10 lakh tonnes of gasoil, 1.1 lakh tonnes of jet fuel and 2.6 lakh tonnes of furnace oil from 10 countries from January to June.

The imports will cost the country Tk 6,651 crore and come from China, the United Arab Emirates, Thailand, Indonesia, Malaysia, Vietnam, Kuwait and the Philippines.

The petroleum products would be imported through government-to-government arrangements.

The committee also approved a proposal allowing the Department of Immigration and Passports (DIP) to buy a further 50 lakh machine readable passport (MRP) booklets and 55 lakh lamination foils from British firm De La Rue under an existing contract at Tk 94.97 crore.

In 2013, Bangladesh signed a deal with the supplier to procure 1.5 crore MRP booklets and as many lamination foils.

As per the deal, the British firm has already supplied 1.48 crore booklets and 1.5 crore foils. The DIP has already used 1.33 crore booklets and 1.36 crore foils, leaving it with a stock of 15.38 lakh booklets and 13.68 foils.

The stocks can meet the country's requirements of booklets and foils for three months as the DIP uses about 3.30 lakh booklets and lamination foils every month.
http://www.thedailystar.net/business/bidders-selected-build-181km-lng-pipeline-1524847