Local Summit Group obtained the government's final approval for setting up its second LNG terminal in Moheshkhali in Cox's Bazar.

Cabinet Committee on Government Purchase in a meeting on Wednesday approved a proposal of the state-owned Petrobangla to award contract to the Summit Group for setting up the new floating storage and regasification unit, kwon as LNG terminal to regasify imported liquefied natural gas (LNG).

As per approval, the Summit Summit Oil & Shipping Co.Ltd., a subsidiary of the Summit Group, will sign a 15-year Terminal Use Agreement (TUA) and Implementation Agreement (IA) to set up LNG terminal with a capacity of handlong 600 million cubic feet per day (MMCFD) to provide the LNG regasification service at a fee of $300,000, equivalent to Tk 3.31 crore.

Also read: Govt to import 2 cargoes of LNG from int’l spot market

Finance Minister AHM Mustafa Kamal presided over the meeting on Wednesday.

The committee's approval followed 'in principle' approval by the Cabinet Committee on Economic Affairs on June 14 this year on the same matter.

This will be the third LNG terminal in the country as there have been two LNG terminals — one was set up by Excelerate Energy of the United States at Moheshkhali of Cox’s Bazar with 500 mmcfd capacity while the other one was established with the same capacity by the Summit Group in the same area.

Both the Excelerate Energy and Summit have been providing the FSRU service to the government since 2018 and 2019 respectively to regasify the LNG imported by the Petrobangla from Qatar and Oman.

Also read: Govt to sign new deals with Summit Group, Excelerate Energy to get long-term LNG supply

The Energy and Mineral Resources Division moved the Summit Group's proposal as an unsolicited one under the Speedy Increase of Power and Energy Supply (Special ) Act 2010, which allows the government to award contracts without a competitive bidding process.

Earlier proposal, approved by the CCEA, revealed the regasification capacity of the proposed Summit's terminal would be 500 million cubic feet of LNG per day (mmcfd). But now the Summit got the final approval for setting up a 600 MMCFD capacity LNG Terminal.

Petrobangla has been supplying 3000 MMCFD gas of which about 2300 MMCFD is locally produced of which 700 MMCFD is imported.

As a result, the country is experiencing a huge shortfall of about 1000 million cubic feet per day (MMCFD) gas to meet the demand for 4000 MMCFD.

Also read: Cabinet purchase body approves import of LNG, rice bran oil and fertiliser

Recently, Petrobangla signed two new deals with Qatar and Oman to receive more LNG supply from 2026 beyond the two existing deals with the two nations. It has also signed a fresh 15-year agreement with Excelerate Energy to import additional LNG from 2026.

A separate proposal of Petrobangla also received the nod of the Cabinet Committee on Government Purchase to import a LNG cargo of 33.60 lakh MMBtu from TotalEnergies Gas & Power Ltd. Switzerland at a cost of Tk 691.73 crore.