DHAKA — Bangladesh on Thursday approved a Chinese proposal to build the country's third floating liquefied natural gas (LNG) terminal, expanding import capacity as a persistent gas shortage weighs on power generation and industry, Reuters reported.

Source: Reuters

The Cabinet Committee on Government Purchase, chaired by Finance Minister Amir Khosru Mahmud Chowdhury, approved a proposal from China's state-owned China National Energy Engineering and Construction (CNEE) to develop the facility, according to a Finance Ministry statement reported by Reuters. The floating storage and regasification unit (FSRU) will be built at Maheshkhali in Cox's Bazar district under a government-to-government arrangement.

Source: Baird Maritime (Reuters / Finance Ministry statement)

The proposal had been pulled from a purchase committee meeting in October for further review of its financial terms before winning approval on Thursday, Reuters reported. Bangladesh already operates two FSRUs at Maheshkhali — one run by US-based Excelerate Energy and one by Summit LNG — with combined capacity of about 1,100 million cubic feet a day, and the third unit would raise that total substantially as domestic gas output falls short of demand.

Source: Baird Maritime (Reuters / Finance Ministry statement)

A price critics have questioned

The Chinese deal has drawn criticism since it was agreed in principle in July. Gas Outlook reported that the proposed daily fee — $342,000 a day under a 15-year build-own-operate option discussed during negotiations — ran about 35 to 37 percent higher than the fees for the existing Excelerate and Summit units, that the arrangement went through a government-to-government framework without open bidding, and that energy experts questioned both the price and whether CNEE, an engineering and construction firm with no prior FSRU development record, could meet an 18-month delivery timeline. Those criticisms were made about the proposed terms during the negotiation stage; Thursday's approval was announced with the 15- and 20-year payment totals above.

Source: Gas Outlook

The project also replaces an earlier plan: the previous interim administration cancelled a deal signed in March 2024 with Bangladesh's Summit Group to build the third FSRU, before the in-principle approval of the CNEE proposal in July this year. What happens next is contracting and construction — whether CNEE holds to the 2028 start, and whether the final daily fee matches the figures critics debated — in a deal that deepens China's role in Bangladesh's energy infrastructure at a time of shortage.