The government has formed a committee to resolve the dispute over the declaration of 'force majeure' by the US's Excelerate Energy and the liquidated damage (LD) claim by state-run Petrobangla due to delays in commissioning the floating LNG import terminal.
The committee headed by Petrobangla director for finance Md Towhid Hasanat Khan would scruitinse contracts and consider other relevant issues before submitting its report, said a senior Petrobangla official.
Excelerate Energy's vessel Excellence had arrived at the Moheshkhali Island LNG (liquefied natural gas) import terminal in the Bay of Bengal on April 24, and was due to start delivering the LNG from May 7.
But technical issues and rough seas during the country's southwestern monsoon in June-August kept it stranded off the south coast of Chittagong for more than three months.
Excelerate Energy finally docked and connected the Floating Storage and Re-gasification Unit (FSRU) to the subsea pipeline network on August 5 after several failed attempts, and started injecting re-gasified LNG on August 12.
Chittagong-based consumers started getting the re-gasified LNG from August 18.
Excelerate claimed 'force majeure' as it justified its 'failure' to initiate supplying re-gasified LNG to consumers in time, said Petrobangla officials.
'Force majeure' is a common clause in contracts 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 parties from fulfilling their obligations under the contract.
Petrobangla also claimed liquidated damage (LD) from the Excelerate as the latter 'failed' to commission and initiate re-gasification of imported LNG timely, causing fiscal losses, they added.
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.
However, both Excelerate and Petrobangla are on the losing side as the US firm was counting cargo rent and other relevant operational costs during the stranded time, while Bangladesh's industrial output faced disruption due to non-supply of re-gasified LNG to its gas-hungry consumers in time.
Petrobangla signed 'terminal use agreement' and 'implementation agreement' with the US firm on the LNG terminal project, 'Moheshkhali Floating LNG Terminal,' in July 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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