People’s Republic of Bangladesh / Overseas Investment Insurance for LNG Receiving Terminal Project –NEXI’s First Insurance Cover for LNG Receiving Terminal Project–

Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Kazuhiko Bando) has decided to underwrite Overseas Investment Insurance for a Liquefied Natural Gas (“LNG”) receiving terminal project that uses a Floating Storage and Regasification Unit (“FSRU”ⁱ) in People’s Republic of Bangladesh (“Bangladesh”). This insurance is to support Mitsubishi Corporation’s investment in the project, by covering political risk and project contract violation in Bangladesh.

Mitsubishi Corporation has acquired, through Summit Group, one of the largest conglomerates in Bangladesh, a 25% interest in Summit LNG Terminal Co (Pvt) Limited (“SLNG”). This is the first business project with the participation of a Japanese company in a LNG receiving terminal project utilizing a FSRU in the country. Under the project, SLNG will install a FSRU 6km off the coast of the island of Moheshkhali in the Cox Bazar District of Chittagong Division in Bangladesh, where it will receive and regasify LNG procured by Petrobangla, the national oil and energy company, over the next 15 years. Construction of the terminal commenced end of 2017 and commercial operations are expected to start in March 2019.

Bangladesh, with its expanding population, and an economic growth rate of more than 6% per annum, is facing a sharp increase in electricity demand. While gas-based generation accounts for approximately 60% of total electricity generation, domestic natural gas production is starting to decline. Therefore, Bangladesh is promoting LNG imports as part of its national energy policy. As LNG receiving terminals with FSRU can be installed at lower cost and constructed within a shorter period than conventional onshore receiving terminals, those terminals are expected to be an effective solution to expand LNG receiving capacity in emerging countries.

Mitsubishi Corporation has been conducting its LNG business globally over many years, and lately engaging in a stable supply of LNG which has a low environmental impactⁱⁱ while developing its power, energy and infrastructure businesses mainly in Asia where there is mounting energy demand. Also, Mitsubishi Corporation is considering with Summit, to jointly develop other LNG-related projects in Bangladesh, from LNG supply to power generation.

To strengthen support for LNG-related projects, NEXI has recently expanded the target scope of Loan Insurance for Natural Resources and Energy. Providing the insurance cover for this project is in line with such NEXI’s policy, and also with the Japanese government’s approach for the U.S. “Free and Open Indo-Pacific Strategy”, which aims to promote peace, stability and prosperity of the international community.

As Japan's governmental financial institution, NEXI will continue to actively support Japanese companies’ overseas businesses.

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ⁱ FSRU is a floating unit equipped with facilities for production, storage and offloading of oil and natural gas on ocean.

ⁱⁱ Natural gas emits relatively less carbon dioxide (CO₂). As main energy resource, therefore, conversion from coal to natural gas has been accelerating.