Summit LNG Terminal II Co Limited, a unit of the Summit Group, has urged the government to reverse its decision to terminate the third floating storage and regasification unit project in the country.
In a press release on Wednesday, the SLNG II said that it had received a notice from the Bangladesh Oil, Gas & Mineral Corporation on 7 October, notifying the termination of the project situated at Moheshkhali in Cox鈥檚 Bazar.
The Moheshkhali terminal in southeast Bangladesh is the second floating gas terminal project undertaken by Summit Group with a planned regasification capacity of 600 million standard cubic feet per day.
The SLNG II clarified that in late 2020, the government made a strategic decision to transition from coal-fired power generation to natural gas, a cleaner energy source.
鈥楾he initiative was also aimed at boosting gas supply to ensure energy security and support industrial growth. Summit Group submitted a proposal on October 11, 2021, to implement a FSRU on a build, own, operate, and transfer basis. The proposal was approved by the cabinet committee on economic affairs on June 14, 2023.鈥�
The press release also said that the approval followed two years of extensive negotiations and consultations with international law firms to address the contractual and technical challenges.
Summit, in collaboration with Petrobangla and Rupantarita Prakritik Gas Company Limited, finalised the terminal use agreement and implementation agreement on October 12, 2023, which were legally vetted and approved by the cabinet committee on December 12, 2023, the press release added.
The SLNG II signed the TUA and IA on March 30, 2024 with Petrobangla and Bangladesh government for the 2nd FSRU. On the same day, the SLNG II also signed a long-term sale and purchase agreement to supply 1.5 million tonnes of liquefied natural gas to Petrobangla, starting in October 2026, mentioned the press release.
To fulfil the initial conditions precedent of the agreements signed on March 30, 2024, the SLNG II has to date committed investments of approximately $15 million to implement the 2nd FSRU.
The termination notice received on October 7, 2024 was issued on the basis that the agreements signed on March 30, 2024 had not become effective as a performance bond was not submitted within 90 days as stipulated.
SLNG II said that as that date fell on a Friday, the performance bond was delivered on the next possible working day, with acknowledgement by Petrobangla.
SLNG II鈥檚 lawyers have confirmed that SLNG II had not breached any CPs of the agreements of March 30, 2024. Even if any CP was delayed, Petrobangla did not notify SLNG II within the agreed 30-day window and had therefore deemed the CP as accepted.
