Dhaka, Bangladesh (BBN)– Bangladesh government has signed an initial deal with the US consortium of Astra Oil and Excelerate Energy four years after the bidding, to build the first liquefied natural gas (LNG) terminal at Moheshkhali island.

On behalf of the government, state-owned hydrocarbon corporation Petrobangla signed the initial deal on Thursday with the Singapore-based US company which will set up a floating storage and re-gasification unit (FSRU) based LNG (liquefied natural gas) terminal by 2016.

Under the initial deal, Petrobangla would provide $0.41 per mmbtu (1.0 million British thermal unit) as a processing fee to cover installation costs of the LNG terminal.

It would stand at $0.474 per mmbtu including other services which include fixed component of toll worth US$1,59,186 per day, operating component, $45,814 per day and other service component of $32,000 per day.

Gross annual payment to be made to the US consortium would be $90.16 million.

The US consortium will build the floating storage and FSRU based terminal at its own cost, while Petrobangla will provide toll for using it, Prime Minister's Energy Adviser Dr Tawfiq-e-Elahi Chowdhury said.

State Minister for Power and Energy Nasrul Hamid, Energy Secretary Mozammel Haque Khan, Petrobangla Chairman Dr Hussain Monsur and Excelerate Energy’s director Sampo Suvisari also spoke at the function.

The floating LNG import terminal would have the capacity to handle 5.0 million tonnes per year of LNG and a regasification capacity of at least 500 million cubic feet per day (mmcfd) at Moheshkhali Island in the Bay of Bengal.

It will have berthing and mooring facilities for LNG vessels with a capacity of 138,000-260,000 cubic meters. The contractor will implement the project on a build-own-operate-transfer basis for 15 years.

International Finance Corporation (IFC) would invest in this project.

BBN/SSR/AD-27June14-11:29 am (BST)