PM’s China visit: Govt seeks $1.38b from Beijing for energy security
The government has sought a $1.38 billion loan from China to build a 295km gas pipeline in Cox’s Bazar’s Maheshkhali for transporting liquefied natural gas (LNG) to ensure energy security, according to sources within the Economic Relations Division (ERD).
They say an announcement regarding the loan may be made after Prime Minister Sheikh Hasina’s visit to China, scheduled for 8-11 July.
The details of the Construction of Maheshkhali-Bakhrabad 3rd Parallel Gas Transmission Pipeline project have already been sent to China through the embassy to facilitate the loan process, as per ERD officials.
In addition to the LNG pipeline project, 12 projects worth $15 billion will be discussed with China during the prime minister’s visit.
Simultaneously, a proposal seeking budget support of $5 billion at a flexible interest rate of 1% has been presented to China.
The major projects Bangladesh is seeking loans for include the China-Bangladesh Friendship Bridge project in Pirojpur, Bhanga Barisal-Kuakata Road project, Special Economic Zone project, Renovation of Dhaka Medical College and Hospital, Sewage Treatment Plant in Mirpur, Metro Rail Line-2, and High-Tech Bridge on Rural Roads project.
All listed projects are crucial for the economic development of Bangladesh, and their implementation will be given top priority, said the ERD in a letter to the Chinese embassy in Dhaka, requesting inclusion of these projects in a joint statement during the upcoming high-level visit of the prime minister.
LNG pipeline project in Maheshkhali
According to the Gas Transmission Company Limited, the proposed 295km Maheshkhali-Bakhrabad pipeline will be built by 2029 and will supply an additional 1,800mmscfd (million standard cubic feet per day) LNG to feed gas-based power plants, fertiliser plants, and industrial and commercial units.
According to the proposal, the implementation work will start this year and the target is to complete the project by 2029.
Earlier in January, Petrobangla Chairman Zanendra Nath Sarker told TBS that the proposed pipeline will directly deliver imported LNG from the proposed land-based LNG terminal to Dhaka.
The chairman further said the new pipeline is to be built mainly to supply gas to the additional distance from Chattogram’s Anwara. “The existing pipelines are not sufficient to supply LNG to Bakhrabad,” he said.
By 2031-32, the supply of gas from Maheskhali to the national grid is expected to reach 3,700mmscfd, with plans for the installation of a land-based LNG terminal in Matarbari. Additionally, there is an anticipation of potential gas discoveries in the Bay of Bengal.
Meanwhile, in a press conference on Wednesday, State Minister for Power, Energy, and Mineral Resources Nasrul Hamid said the Energy Division has made two proposals for the prime minister’s upcoming visit to China, seeking Chinese funding.
He mentioned that the Energy Division wants Chinese funding to set up the gas transmission line in Maheshkhali on a government-to-government (G2G) basis. Two Floating Storage Regasification Units (FSRU) have already been constructed at Maheshkhali, and two more FSRUs are planned, he said.
Nasrul said the government’s goal is to ensure there are no gas shortages by 2027. To achieve this, 46 gas wells are currently being excavated, and there are plans to dig an additional 100 gas wells. The government also plans to jointly explore gas onshore with private companies.
The daily gas demand in the country is projected to be 600 crore cubic feet in 2027. Currently, the country’s daily gas demand is 380 crore cubic feet, the minister said.
Other projects
In 2016, a memorandum of understanding (MoU) titled “Strengthening and Production Capacity Cooperation” was signed during the visit of the President of China to Bangladesh. This MoU includes an assurance of implementing 27 projects worth $20 billion.
So far, loan agreements worth $8.076 billion for nine projects have been signed.
ERD sources indicate that discussions during the prime minister’s visit may focus on expediting the signing of agreements for the remaining projects.
Three projects from the old list have been included in the new list, including a loan proposal of $221 million for the Establishment of Special Economic Zone project, $198 million for the Construction of the Sewage Collection System under Dasherkandi STP Catchment of Dhaka City project, and $236 million for the Procurement of New 04 Vessels project.
Among the projects to be discussed, the 35km Mass Rapid Transit (MRT) Line-2 project, stretching from Gabtoli to Narayanganj, is projected to cost Tk60,836 crore, equivalent to $5.2 billion.
The ERD letter sent to the Chinese embassy in Dhaka reads, “Metro Line 2 is considered an iconic project, providing a significant opportunity for China to make its mark in urban transport and showcase Chinese technology alongside other development partners.”
Additionally, Chinese financing may be sought for the Faridpur-Barishal and Barishal-Kuakata four-lane road construction project, with an estimated cost of $3.04 billion.
