State-run Petrobangla has cancelled a deal with the consortium of Hong Kong Shanghai Manjala Power Ltd (HSMPL), consisting of Malaysia's Petronas and local Global LNG, for building a FSU and a fixed jetty-based LNG import terminal.
The 'term sheet agreement' was inked on October 16, 2017, following approval from the country's Cabinet Committee on Economic Affairs, said a senior Petrobangla official.
The consortium was supposed to build a FSU (floating storage unit) with the capacity of 3.75 million tonnes per year (Mtpa) along with a fixed jetty-based re-gasification unit on Kutubdia Island in Cox's Bazar near the country's maiden FSRU at Moheshkhali.
The deal was cancelled to avoid any unpleasant situation, as the country is now struggling to operate the existing FSRU (floating storage re-gasification unit), he also said.
Petrobangla last month terminated talks with Indian Reliance Power to build a similar 3.75-Mtpa FSRU on Kutubdia Island for LNG import.
A couple of months back it also shelved plans for three small-scale FSRUs, following objections from the country's main port authority, and as LNG import at its first full-sized FSRU ramped up.
Global commodity traders -- Trafigura, Gunvor and Vitol -- as well as Belgium-based shipping company Exmar NV were in final talks with Petrobangla and its subsidiary RPGCL to build the mini FSRUs and sell gas to Petrobangla.
The mini FSRUs were to supply around 200 million cubic feet per day (mmcfd) of regasified LNG to Petrobangla for over 10 years.
Petrobangla inked these deals and continued talks with the sponsors concerned under Speedy Supply of Power and Energy (Special Provision) (Amendment) Act 2010, through bypassing competitive tender process.
The act has given the government sweeping authority to bypass the existing legislation for energy and power sectors, so that it can implement projects quickly.
But these cancellations have come as a source of disappointment for the commodity traders and shipping companies, who were in talks with Petrobangla for building the small-scale LNG projects or supplying gas to them.
Regasification in Bangladesh's maiden floating LNG import terminal is now suspended. Besides, Petrobangla has already cancelled two regular 140,000 cubic-metre cargoes, and asked its main supplier Qatar's RasGas to suspend deliveries while a fault with an underwater valve is remedied.
An 'actuator valve' between the Excelerate Energy-owned FSRU --Excellence -- and subsea pipeline started leaking at around 7.00 pm local time on November 03, forcing regasification operations to be halted. Petrobangla expects to reinitiate regasification from it from November 15.
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