Summit plans to develop a second FSRU project in Bangladesh by 2026

_{LNG terminal operator Summit Asia Pacific plans to bring a second floating LNG import terminal online in Bangladesh in early 2026, with the new facility expected to boost the country’s LNG import capacity by 4 mtpa.}

Located in Moheshkhali, the terminal will be Bangladesh’s third floating storage regasification unit (FSRU) -based terminal. Summit owns and operates one of Bangladesh’s two existing 3.8 mtpa FSRU-based terminals in Moheshkhali, the Summit LNG terminal. Excelerate Energy owns the other FSRU-based terminal, the 3.8 mtpa Moheshkhali LNG terminal.

The floating LNG import project is part of Bangladesh’s master plan to build additional LNG import terminals to address rapidly declining domestic gas output and rising demand.

Bangladesh has imported LNG since 2018 to supplement a gas supply shortfall. But LNG imports and import capacity will need to increase to ensure stable supply due to dwindling domestic gas supplies, Summit’s General Manager for long-term supply and infrastructure development Mohd. Nurman said during the FSRU Asia Summit in Singapore today.

Nurman expects Bangladesh’s LNG demand to hit 8 mtpa by 2026, outstripping the current 7.6 mtpa LNG import capacity and making it key for new import capacity to come online by that time. And, gas demand is expected to keep rising, reaching 10 mtpa by 2030 and 30 mtpa by 2040, he said.

Summit has received government approval for its second LNG import terminal, and signed a 15-year terminal user agreement with state-owned energy firm Petrobangla that underpins the project.

The firm has yet to secure an FSRU for the project and its requirement comes amid a lack of available FSRUs in the market after Europe took most of the available FSRUs last year in an effort to boost LNG import capacity and energy security following Russia’s massive curtailment of pipeline gas supplies to the region.

LNG carrier conversions are “the only option” for the terminal operator to meet a 2026 start-up timeline, Nurman told Kpler. An LNG ship will need to be retrofitted with regasification modules and a large storage tank as part of the conversion.

“Looking at the timeline of 2026, it’s impossible to deliver a newbuild FSRU,” he said. “The only option is a conversion FSRU because all the available FSRUs are taken. It takes two years to convert an LNGC to an FSRU and the timeline is tight.”

Summit also hopes to develop another LNG import project, a 7.5 mtpa land-based terminal in Matarbari in Bangladesh.

This, together with a 4 mtpa FSRU-based terminal that Excelerate is developing, will bring the total number of import terminals to five and combined LNG receiving capacity to around 23 mtpa by the end of the decade, according to Nurman.

The firm has partnered with Japan’s Jera to compete in a government tender to build the onshore LNG receiving terminal in Matarbari that is anticipated to come online by 2030. The Summit-Jera partnership is one of seven shortlisted bidders, Nurman said.

Summit signed a memorandum of understanding with Jera in April to collaborate on the development of LNG supply, storage and regasification and LNG. The MOU also covers the cooperation on long-term LNG supplies to Bangladesh.

The onshore terminal will be adjacent to a 1.2 GW modern coal-fired power plant and able to access port facilities at Matarbari. And, in Payra, in the southwest of the country,  Excelerate is developing its 4 mtpa FSRU-based terminal that will have an onshore pipeline connection to the city of Khulna. Excelerate is also negotiating a long-term LNG supply agreement with the government of Bangladesh.

According to Kpler data, Bangladesh imported 1.57 mt of LNG in the first four months of this year, little changed from its receipts of 1.58 mt over the corresponding period last year.

High prices particularly in the second half of last year kept the South Asian country out of the spot market, resulting in a 13% drop in imports to 4.43 mt last year from 5.08 mt in 2021. Last year, Summit LNG accounted for 1.95 mt, or 44%, of the country’s total imports, while Moheskhali received the remainder.

Bangladesh receives LNG under two contracts, one with Qatar for 2.5 mtpa and another with Oman’s OQ Trading, previously Oman Trading International (OTI, for 1 mtpa.

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