The state-run Petrobangla has finally started utilising the full capacity of the US-based Excelerate Energy's floating LNG terminal by re-gasifying around 500 mmcfd equivalent of LNG for consumers since Friday (Jan 25).
As a result, the Petrobangla can also escape from paying 'capacity payment' to Excelerate after more than five months since the beginning of commercial operation of the floating, storage and re-gasification unit (FSRU) -- Excellence -- on August 18, 2018.
With the increased supply of re-gasified LNG (liquefied natural gas), the country's overall natural gas output reached to 3,085 mmcfd as on January 26, according to statistics from Petrobangla.
Most of the local gas-fields, owned by state-run gas entities and international oil companies (IOCs), however, have started producing less gas following the starting of full capacity re-gasification in the LNG terminal.
Of the total re-gasified LNG, the Karnaphuli Gas Distribution Company Ltd (KGDCL), dedicated for supplying natural gas to Chattogram region, is taking around 310 mmcfd, or 70 per cent of the total quantity.
Some 150 mmcfd equivalent of re-gasified LNG is being supplied to Titas franchise areas, managing director of state-run Gas Transmission Company Limited (GTCL) Ali Mohammad Al Mamun told the FE on Sunday.
The remaining 40 mmcfd is being supplied to Pashchimanchal Gas Company Ltd (PGCL), he added.
The country's overall natural gas supply situation improved substantially with the starting of full capacity re-gasification in the floating LNG terminal, said a senior Petrobangla official.
Officials said Petrobangla had to count capacity payment to Excelerate Energy, owing to its failure to re-gasify less than the agreed quantity of LNG to the tune of 500 mmcfd since commissioning of the FSRU.
Non-completion of the 30-kilometre pipeline forced Petrobangla to count substantial capacity payment so far.
According to terminal use agreement, Petrobangla is required to pay the US firm around US$ 237,000 (Tk 20.14 million) per day, no matter it utilises the full capacity of FSRU or not.
Until Friday, the state-run corporation could utilise the maximum of 65.6 per cent capacity of the FSRU by re-gasifying 328 mmcfd and supplying it to consumers. The remaining 34.6 per cent capacity of the vessel remained unused.
The long-awaited Anwara-Fouzdarhat gas transmission pipeline became functional on November 27, 2018, and was ready to carry additional re-gasified LNG since then. But scarcity of LNG kept the new pipeline mostly unused.
Lack of coordination between the GTCL and the Rupantarita Prakritik Gas Company Limited (RPGCL) was blamed for the setback, as Qatar's RasGas declined to increase LNG supply then.
Petrobangla has so far imported 14 regular cargoes for re-gasification.
Excellence arrived at Moheshkhali terminal, carrying the country's first LNG cargo on April 24. But it got connected to the subsea pipeline network on August 05, and commenced injecting the first regasified gas on August 12.
Technical issues and rough seas during the June-August monsoon season kept it stranded off the south coast of Chattogram for months.
Excelerate Energy has claimed 'force majeure', as the company tried to justify its 'failure' to initiate supplying re-gasified LNG to consumers on 'bad weather' alone.
'Force majeure' is a common clause in a contract that essentially frees both the parties from liability or obligation, when an extraordinary event or circumstance beyond the control of the parties prevents one or both of them from fulfilling their respective obligations under the contract.
While, Petrobangla claimed liquidated damage (LD) from Excelerate, saying the latter 'failed' to commission and initiate re-gasification of imported LNG timely.
© 2024 - All Rights with The Financial Express
