November 8, 2017 [The Daily Star] - The National Board of Revenue has granted tax exemption to the builder and owner of the country's first LNG terminal that is being set up in Moheshkhali with the view to facilitating the import of gas to overcome the growing energy crisis.
Excelerate Energy Bangladesh Ltd, a subsidiary of US-based Excelerate Energy, which will build the floating storage and regasification terminal, will receive imported LNG, gasify the liquids and pump it to the national grid at the rate of 500 million cubic feet of gas per day (mmcfd).
The tax administration said the builder and owner of the terminal, which is being established under the Build, Own, Operate and Transfer basis, will be exempt from tax payment on the income from the project.
The terminal company however will have to maintain its accounts properly and submit returns regularly, said the NBR in a notification on October 30. A senior official of the NBR said the tax break has been given based on a contract signed between the government and Excelerate.
Excelerate Energy will hand over the terminal to state-run Petrobangla after 15 years of operations as per the contract. The tax exemption will only be during the period of its operations, the official said.
The LNG import terminal at Moheshkhali, the first-of-its-kind in Bangladesh, is expected to be in service by the middle of 2018, Excelerate Energy said in July.
The terminal will enable Petrobangla to increase the natural gas supply by up to 20 percent, sufficient to generate up to 3,000 megawatt of power.
The project, which will cost $179.5 million, will be located on Moheshkhali Island in the Bay of Bengal, according to Excelerate Energy.
The government in 2010 took the decision to import LNG in the backdrop of growing local demand particularly from industries and falling domestic reserves of natural gas.
The country produces and supplies about 2,700mmcfd of natural gas every day against the demand of 3,500mmcfd, according to Petrobangla.
The state agency in an analysis found that an annual import of 1,000 mmcfd gas, which will cost $3 billion, may ease the decades-long gas crisis in the country.
As of now, the government has decided to set up a number of floating LNG terminals to import gas. The second one will be supplied by Summit Group and is due for commissioning by next October.
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