Mitsubishi Corporation (MC)has agreed to acquire a 25 per cent interest in Summit LNG Terminal Co (Pvt) Limited (SLNG)to develop a liquefied natural gas receiving terminal that uses a floating storage and regasification unit (FSRU) in Bangladesh, the company said in a press statement.

With the acquisition, 75 per cent  of SLNG will be held by Summit Corporation Limited (“Summit”) and remaining by MC.

Under the project, SLNG will install an FSRU 6 km off the coast of the island of Moheshkali in the Cox’s Bazar district of Chattagram division in Bangladesh, where it will receive and regasify LNG procured by Petrobangla, the national oil and energy company. Construction of the terminal commenced at the end of 2017 and commercial operations are expected to start in March 2019. The planned LNG import volume is approximately 3.5 Million Tons Per Annum (MTPA).

Bangladesh, with its expanding population, and an economic growth rate of more than 6 per cent  per annum, is also seeing a rapid increase in electricity demand. While gas-based generation accounts for approximately 60 per cent of total generation, domestic natural gas production is starting to decline. Bangladesh is therefore promoting LNG imports as part of its National Energy Policy. Bangladesh will start importing LNG in 2018, with a targeted import volume of 17 MTPA in 2030.

LNG receiving terminals that use FSRUs can be installed at a lower cost and constructed within a shorter period than conventional onshore receiving terminals, and hence are an effective means to build LNG receiving capacity in emerging countries. The demand for such terminals is expected to grow.

In addition to this project, Summit and MC have agreed to jointly pursue other projects across the LNG value chain in Bangladesh, from LNG supply to power generation.