Bangladesh starts operations at country's first LNG terminal

[DHAKA] Bangladesh has started operations at the country's first liquefied natural gas (LNG) terminal, the country's energy minister said on Monday, following delays related to technical problems and bad weather.

The floating storage and regasification unit (FSRU), which arrived in Bangladesh in April to offload its maiden cargo of LNG from Qatar and moor permanently as an import terminal, began operations on Saturday. It was initially expected to start in May.

The start-up will allow Bangladesh to import LNG to offset falling domestic gas production, feeding industrial demand and power generation in a nation where 30 percent go without electricity.

Since its arrival at Moheshkhali, near Cox's Bazar in southeast Bangladesh, in April, bad weather has hampered the FSRU's efforts to dock properly, connect to the import infrastructure and offload its first cargo of Qatari LNG, officials have said.

The FSRU initially started operations last week but had to call a halt due to a leak in an onshore facility, a source told Reuters.

"We have started the process of feeding the gas to the grid," Nasrul Hamid, Bangladesh's state minister for energy and power told Reuters on Monday.

"This is a first step and we are taking more initiatives to meet growing consumption needs and feed the expanding economy."

The Excellence FSRU is operated by privately owned U.S. company Excelerate which had declared force majeure on the project due to the delays. Declaring force majeure absolves a company from responsibility for delays to fulfilling contracts due to circumstances beyond its control.

Asked about the force majeure, an official at state-owned national oil company Petrobangla said "everything will be resolved as per the agreement".

The country of 165 million people relies on its gas resources for 70 per cent of energy production but as demand has risen its falling supply has struggled to keep up, prompting it to consider a host of LNG projects.

REUTERS