The Asian Infrastructure Investment Bank (AIIB) has approved $60m loan for Bangladesh Natural Gas Infrastructure and Efficiency Improvement Project, co-financed with the Asian Development Bank.
To address the gas supply deficit that will eventually impact Bangladesh’s energy security and constrain the nation’s economic growth, the Government of Bangladesh has taken steps to diversify the gas supply through imports either by cross-border gas transmission pipeline or as liquefied natural gas.
The project fits within these development plans to avoid a gas crisis.
The Project includes two components. Under component 1, seven wellhead compressors (5 operating and 2 stand-by) will be installed in Titas Gas Field.
Upon completion, it is estimated that an additional 1.0 trillion cubic feet of gas will be produced from the Titas gas field.
Under component 2, a 181 km, 36-inch gas transmission pipeline will be constructed. The proposed pipeline will constitute a trunk transmission pipeline between Chittagong and Bakhrabad to transport regasified LNG to central and west gas markets.
The objective the proposed Project is to: (i) improve efficiency in the current gas production in the Titas Gas field; and (ii) expand gas transmission pipeline capacity between Chittagong and Bakhrabad.
Upon completion, it will help maintain the current level of production at required delivery pressure to the gas transmission network, and overcome the capacity limitation of the existing 24-inch transmission line.
Furthermore, the project will complete a full looping of the original trunk gas pipeline, which is crucial to ensure a dependable and reliable gas transmission network, and increase operational flexibility and supply integrity.
The Project is estimated to cost $453.0 million, including taxes, duties, contingencies, and financing charges during construction. ADB’s loan and the Bank’s loan will be used on a pro-rata basis to finance the cost items.
Any shortfall in the funds required would be covered by either the government or implementing agencies such as Bangladesh Gas Fields Company Limited (BGFCL) and Gas Transmission Company Limited (GTCL).
The Project will be implemented in five years, between January 1, 2017 and December 31, 2021.