AIIB Approves $60mn Loan for Bangladesh Gas Project

Beijing headquartered Asian Infrastructure Investment Bank (AIIB) has sanctioned a $60mn loan for a Bangladeshi natural gas project that should help the south Asian nation alleviate its energy shortage.  

The Bangladesh Natural Gas Infrastructure and Efficiency Improvement Project is co-financed with the Asian Development Bank (ADB). In November last year, ADB approved a $167mn loan to Bangladesh. The Bangladesh government will provide $226mn for the $413mn project. 

The project includes two components. Under component one, seven wellhead compressors (5 operating and 2 stand-by) will be installed at the Titas gas field. Upon completion, it is estimated that an additional 1tn ft³ will be produced from the Titas gas field. Under component two, a 181-km, 36-in gas transmission pipeline will be built. The proposed pipeline will constitute a trunk transmission pipeline between Chittagong and Bakhrabad to transport regasified LNG to central and west gas markets.

“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,” AIIB said March 28.

Natural gas is Bangladesh's main energy source and a major driver of economic growth, providing nearly 75% of total primary energy consumed. The government has been working to not only increase domestic gas production but it also looking at importing LNG. State owned energy firm Petrobangla has signed multiple agreements pertaining to setting up of LNG import terminals. 

Shardul Sharma