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'Failure' to start LNG re-gasification

Govt claims LD from Excelerate Energy

M Azizur Rahman | July 30, 2018 00:00:00

LNG supply chain —Internet graphic

The government has claimed liquidated damage (LD) from the US-based Excelerate Energy Bangladesh Ltd (EEBL), as the latter 'failed' to commission and initiate re-gasification of imported LNG (liquefied natural gas) timely, said officials.

The loss caused due to delay or failure in completion of the work as per the agreed contract conditions imposed by the employer or client is meant as LD.

A senior official of the Petrobangla said the EEBL was supposed to start supplying re-gasified LNG to gas transmission pipeline for consumption by clients by May 06, 2018.

The state-run Rupantarita Prakritik Gas Company Ltd (RPGCL), a wholly-owned subsidiary of the Petrobangla, claimed the LD to be effective from July 06 after 60 days of the commissioning deadline for the re-gasification of LNG by the EEBL, said the official.

The EEBL earlier claimed 'force majeure', as it justifies its 'failure' to initiate supplying re-gasified LNG to consumers in time.

Although both the parties have claimed 'force majeure' and LD separately, both are trying to initiate re-gasification of LNG and supply the fuel to consumers as early as possible, he added.

Excelerate would try again to fix up the system on August 01 to initiate supplying re-gasified LNG from August 08, said sources.

The US-based company's floating, storage, and re-gasification unit (FSRU) has remained stranded for over the past three months in the Bay of Bengal, carrying Qatari LNG.

But the vessel has not yet started supplying re-gasified LNG, as it could not be tied up with sub-sea pipeline.

The vessel arrived at the Moheshkhali LNG terminal on April 24, carrying 136,009 cubic metres of fuel from Qatari RasGas, with which the country joins the group of LNG importers.

The FSRU has been moored on the Moheshkhali Island, near the port of Chattogram. It has the capacity of re-gasifying 3.75 million tonnes of LNG per year.

But the 'complexities' in tying up the FSRU with subsea pipeline and its 'synchronisation' have held up the supply of re-gasified LNG to consumers since then.

Top officials of the state-run Petrobangla and the Energy and Mineral Resources Division announced at least four separate dates for initiating the supply of re-gasified LNG, as the Excelerate was trying to resolve the problem from time to time.

But the FSRU could not to be tied up, or plugged-up, with the sub-sea pipeline yet due to rough weather in the sea, insiders said.

If the sea wave-height in the Bay of Bengal could be within 1.0 metre, the FSRU could easily be tied up and synchronised with the sub-sea pipeline, an engineer involved with the job told this correspondent.

But currently, the wave-height is 2.0 metre and above, he added.

Both the Excelerate and Bangladesh are on the losing side, as the US firm has been counting cargo rent and other relevant operational costs.

On the other hand, the country's industrial output is being hampered due to non-supply of re-gasified LNG to its gas-hungry consumers in time, he added.

But industry insiders said even if the tying up and synchronisation are completed, the FSRU's full capacity re-gasified LNG could not be supplied, as the construction of necessary pipeline is not yet completed.

The FSRU might be able to evacuate only around 250 million cubic feet per day (mmcfd), or half of the FSRU's re-gasifying capacity, from the day one.

The construction of a 30-kilometre and 42-inch diameter Anwara-Fouzdarhat gas transmission pipeline seems to be the major hurdle in transmitting the re-gasified LNG, he added.

A 91-km and 30-inch natural gas pipeline from Moheshkhali to Anwara has, however, been completed much earlier and undergone the necessary testing to carry re-gasified LNG to Chattogram consumers initially.

Petrobangla signed 'terminal use agreement' and 'implementation agreement' with the US firm on the LNG terminal project, 'Moheshkhali Floating LNG Terminal,' on July 07, 2017.

Excelerate built the re-gasification unit on the build, own, operate and transfer (BOOT) basis, he said.

It would charge US$ 0.49 per Mcf (1,000 cubic feet) against its service from the day one.

Petrobangla would buy re-gasified LNG from the terminal on the take-or-pay basis as per the contract.


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