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Pertamina signs MoU to Develop gas power plant and FSRU in Bangladesh

Indonesia and Bangladesh on Sunday (28/01) signed two MoUs on ‘Development of Integrated Gas Infrastructure and Independent Power Producer’ and ‘Foreign Office Consultations’. (Image credit : Presidenri.go.id)

JAKARTA (RambuEnergy.com) – Indonesia’s state-owned diversified energy company PT Pertamina and Bangladesh Power Development Board (BPDB) on Sunday (Jan. 28) signed a memorandum of understanding (MoU) to develop an integrated gas project, comprising of a Combined Cycle Gas Turbine (CCGT) Power Plant with installed capacity of 1400 MW and a Floating, Storage and Regasification Unit (FSRU) with total investment of US$2 billion, approximately equals to Rp26.3 trillion.

The MoU on ‘the Development of Integrated Gas Infrastructure and Independent Power Producer’ was signed by Vice President for Power, New, Renewable Energy of Pertamina Ginanjar and Chairman of BPDB Khaled Mahmood and witnessed by the Indonesian President Joko Widodo and Bangladesh Prime Minister Sheikh Hasina in Dhaka.

President Widodo was in Bangladesh as part of his State Visit to South Asian nations.

The gas power plant will be connected with a Floating Storage and Re-gasification Unit (FSRU), and supported by mooring and off-loading infrastructure as well as subsea and onshore gas pipeline, which will also be developed by Pertamina together with Petrobangla of Bangladesh.

Pertamina said in a statement that the construction of the integrated gas-based infrastructure facility is projected to take three years from financial closing. The construction of the project is scheduled to start in 2019.

The above MoU was a follow-up deal between the Indonesian Energy and Mineral Resources Minister Ignasius Jonan and Bangladesh State Minister for Power, Energy and Mineral Resources Nasrul Hamid on Sept 15, 2017 in Jakarta.

The MoU between the two government’s energy ministry (G to G) becomes a legal basis for the cooperation between two state companies. Under the deal, Pertamina will develop the FSRU and supporting facilities as well as exporting LNG to Bangladesh.

The development of gas-based power plant was a move by Bangladesh government to narrow is gas deficit around 1 million tons per annum (MTPA) and is likely to rise to 11 mtpa by 2030.

With its gas reserves depleting, Bangladesh is now heavily investing in LNG as it aims to boost its power generation capacity to 24,000 megawatt by 2021, according to energybangla.com.

In September last year, Bangladesh signed its first-ever LNG import deal with Qatar. Under the 15-year deal, the world’s biggest LNG exporter will supply 1.8 million tonnes a year for the  first five years and 2.5 million tonnes a year for the next 10.

Two floating storage and regasification units or FSRU are expected to add gas to the national grid.

The first to be built by Excelerate Energy of the United States is to be commissioned by April and the second by Summit LNG in October.

State Minister for Energy and Power Nasrul Hamid had said Bangladesh could import as much as 17.5 million tonnes of LNG a year by 2025. (*)

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