Experts stress on alternative steps for LNG terminal deal
Reza Mahmud :
Summit Group on Wednesday said the Petrobangla’s decision to terminate the country’s third Floating Storage and Regasification Unit (FSRU) project is invalid, the group urged to reconsider it and warned that delays in its implementation could exacerbate Bangladesh’s energy insecurity.
In a press release, Summit said that the project’s termination, on which it has already invested around $20 million, is invalid.
Summit Power International Limited (SPIL), the largest private sector power generation and energy infrastructure company in Bangladesh, is the parent entity of Dhaka-based Summit Corporation Limited, which owns SLNG II.
Energy experts also said the government’s decision of cancelation of LNG terminals without measuring alternative sources would be vulnerable for the energy sector of the country.
When contacted, eminent energy expert Professor Dr. Ijaz Hossain told The New Nation on Wednesday, “Without taking alternative measures the cancellations of LNG terminals might push the country’s energy sector into crisis.”
He suggested the government to buy the proposed terminal from Summit Group or pave way for purchasing that by any third party so that the country could be benefitted. Contacted, energy Expert Dr. Badrul Imam also echoed the same.
The expert said, “The government has cancelled deal with two major LNG terminal project while there is no alternative one visible.”
He warned that such actions might make the energy sector vulnerable as shortages of gas will push the power sector into a deep crisis.
Petrobangla and the Bangladesh Ministry of Power, Energy and Mineral Resources issued a letter on January14, alleging that certain conditions under the Terminal Use Agreement (TUA) signed with SLNG II had not been met, leading to the TUA’s termination.
Summit noted that SLNG II had signed the TUA and Implementation Agreement (IA) for the third FSRU on March 30, 2024, with Petrobangla and the Bangladesh government, respectively. Both agreements were legally vetted and received approval from the Cabinet Committee on December 12, 2023.
The third FSRU, the second such project in Bangladesh by Summit Group, is designed to have a regasification capacity of 600 million standard cubic feet per day, requiring an investment of approximately $550 million in foreign direct investment. Despite this, Petrobangla announced on October 7, 2024, that the project in southeastern Bangladesh would be terminated.