BANGLADESH

Bangladesh has started work to set up its first floating terminal for importing liquefied natural gas (LNG) with an investment of $500 million, a senior energy official said on Monday.

"It is due to be completed by the end of 2013, if everything goes well," Mohammad Hossain Mansur, chairman of the state-run Bangladesh Oil, Gas and Mineral Corporation (Petrobangla), said.

"We have already awarded the consultancy services to Australian firm Poten & Partners," he told Reuters.

The terminal will be built up 1.5 kilometres from Moheshkhali island in the Bay of Bengal.

Petrobangla signed an agreement with the Australian firm last week to facilitate the implementation the project, Mansur said.

Poten & Partners will also help Petrobangla in transmission and marketing of the LNG which the south Asian country is going to import to ease pressure on natural gas.

"We focused on LNG use to diversify the energy sources to ease energy crisis," Mansur said.

Natural gas, Bangladesh's principal source of energy, is depleting fast, likely to be fully exhausted by the end of 2015 unless new gas reserves are found, officials said.

About 80 percent of the country's manufacturing firms and electricity-producing plants are fuelled by natural gas. Bangladesh at present produces around 2.0 billion cubic feet of gas per day (bcfd) leaving a shortage of more than 500 million cubic feet.

Petrobangla floated an international tender last November for a 15-year build-operate-and-transfer contract.

"We have already short-listed a number of international firms and the process will be completed soon," Petrobangla's Mansur said.

The terminal will have facilities for berthing and mooring of LNG ships with a capacity of 138,000 to 260,000 cubic metres, and for LNG storage and re-gasification, the chairman said.

Petrobangla last year signed a memorandum of understanding to import 4 million tonnes of LNG annually from Qatar Petroleum.