THE government, in principle, has decided to import a costly alternative to natural gas, and thus signed an unsolicited deal with a US-Singapore consortium namely Astra and Excelerate (AEC). A news report of an English daily on Thursday said, the consortium is going to build the first-ever floating LNG terminal in Bangladesh and import gas for $17.1 per million cubic feet (mmcfd), 10 times higher than the current gas sales price. Energy experts thus fear that this unfortunate higher cost of the energy will add another burden to the expenditure level of the common masses. The industrial output will also be more costly and it will be followed by a chain reaction of the increasing price for power.The report said, the Cabinet committee on Economic Affairs approved the deal with the AEC under the Power and Energy Fast Supply Enhancement (Special Provision) Act, 2010. The Finance Minister said that the price of the imported gas would have been much higher, but was not as it would be mixed with local gas. But an Energy Ministry proposal said, if LNG is mixed with local gas, the average cost of gas would rise to $4.39 per mmcfd from $1.7, paving ways for a gas price hike in the near future.Petrobangla is now set to sign an agreement with the AEC for setting up the terminal and the company is expected to start supplying gas by mid-2016. AEC would install the terminal at Maheshkhali in Cox’s Bazar to facilitate LNG import from Qatar.AEC proposed to build the terminal at a cost of around $300 million. The consortium will handle it for 15 years before handing it over to the government. If four million tonnes of LNG is imported from Qatar a year, the price of per mmcfd LNG will be $14 with delivery and shipping costs. Adding the duty, tax and other expenses, the cost will be $17.1 per mmcfd at the delivery point with a service charge of 56 cents per mmcfd gas for utilising the LNG terminal and shipping services. AEC will also claim another service charge if the container sits idle in case the government does not import LNG after the terminal’s construction.The Energy Ministry presently estimates that the government will have to spend around $2.7 billion annually for importing 500 million cubic feet per day (mmcfd) of LNG and for using the floating terminal. With the AEC proposal, the Ministry noted the estimated diesel import price was Tk 74 a litre. When a combined cycle power plant uses it, the cost of electricity stands at Tk 16.13 per unit.What is the benefit of such a highly cost project when it fuels our per capita foreign debt burden? The country already faced a shortfall of around 500mmcfd gas for the last one decade. The government must think of alternative energy resources to meet the crisis. But it seems that government is just considering the interest of some people in and around the power centres because kicking off such projects will only open options for huge kickbacks and corruption.
