After scrapping a deal signed by the previous government with local Summit Group, the interim government has now taken a fresh move to build a new floating LNG terminal of similar type at the same site on the Moheshkhali island, said sources.
The energy and mineral resources division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR) has already instructed state-run Petrobangla to take steps in this regard, Petrobangla Chairman Zanendra Nath Sarker told the FE on Tuesday.
"We are now preparing documents to float an international tender soon," he said.
Officials said the MPEMR directed the Petrobangla to float international tender either under the Public Procurement Act 2006, Public Procurement Rules 2008 or Bangladesh Public-Private Partnership Act 2015 to implement the floating storage and re-gasification unit (FSRU) project in the shortest possible time.
The interim government took the decision following a recommendation by a four-member committee of purchase experts, and a deputy attorney general, said a senior official at the EMRD.
Earlier, the government scrapped the Terminal Use Agreement (TUA) and Implementation Agreement (IA) with Summit LNG II Terminal Co. Ltd. in line with the recommendation of the committee, he added
The EMRD had constituted the committee on September 11 to advise the MPEMR about the next course of action on setting up of the FSRU as the country has long been grappling with gas supply shortage.
Under the deals cancelled, Summit was supposed to build the country's third FSRU with a liquefied natural gas (LNG) re-gasification capacity of 4.50 million tonne per year (MTPA) on build, own, operate and transfer (BOOT) basis by 2026 and continue operations for 15 years.
The daily fee, as agreed, was US$300,000 per day on a binding take-or-pay basis.
The deals on Summit LNG Terminal II Co. Ltd. were signed under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 (Amended 2021) bypassing competitive tender, the official said.
Petrobangla cancelled the contract of Summit Group on October 7 due to non-compliance of the contract terms, the Petrobangla chairman said earlier.
It was the first time Bangladesh scrapped a FSRU deal with a contractor.
Referring to violation of the conditions precedent, a senior EMRD official said, as per the terms of the deals Summit was supposed to deposit a performance guarantee worth US$20 million within 90 days of inking the deals, meaning by June 28 this year.
But Summit deposited the guarantee money on June 30, two days after the deadline, he said.
Summit carried out a met-ocean survey over its second LNG FSRU and submitted a report to the state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) before getting the project cancelled.
"We believe this is unjustified and we will appeal for a review," said Summit Group in an impromptu statement.
Summit Group's existing 3.75 MTPA FSRU - Summit LNG Terminal Co. Ltd. - located on Moheshkhali island in the Bay of Bengal, started commercial operation on April 30, 2019, and will remain operational for 15 years until 2033 as per the existing contracts.
A senior official of the MPEMR said that a number of projects inked under the special law over the past 14 years are also at risk of cancellation or contract reviews.
After taking office, the new adviser for power and energy, and road transport and bridges Muhammad Fouzul Kabir Khan of the interim government halted all negotiations, selections, and purchasing processes of all power-and energy projects.
All activities of the already signed deals under the special law, known as 'controversial law' in the power-and-energy sector will, however, continue as per the instruction of the energy adviser.
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