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Summit said in a statement on Wednesday that the termination was “not only invalid but that any delay to the project, for which Summit has already invested approximately $20 million on implementation, could result in further energy insecurity in Bangladesh.”
On January 14, Petrobangla and the Bangladesh Ministry of Power, Energy and Mineral Resources issued a letter notifying that certain conditions under the terminal use agreement (TUA) signed earlier with Summit LNG Terminal II (SLNG II), had “purportedly not been fulfilled and as such the TUA is terminated.”
SLNG II, a Dhaka-based subsidiary of Singapore-based Summit Power International (SPIL), then wrote to Petrobangla to state its objections to the notice.
In March last year, SLNG signed the TUA and IA for the third FSRU with Petrobangla and the government of Bangladesh respectively, but Petrobangla notified the company in October that the project in southeast Bangladesh would be terminated.
Since then, Summit has obtained legal advice from both local and international legal firms which “affirmed that such termination is invalid pursuant to the terms of the TUA.”
“Based on such advice, Summit Group engaged with Petrobangla and the government of Bangladesh to reconsider the decision,” it said.
Summit already operates the second FSRU-based facility in Bangladesh which is served by Excelerate Energy’s 138,000-cbm FSRU Summit LNG
Besdes the Summit terminal, Bangladesh also imports LNG via its first LNG import facility, Moheshkhali Floating LNG or MLNG, operated by Petrobangla,
Summit’s second such project has a planned regasification capacity of 600 million standard cubic feet per day.
It would require investment of about $550 million coming in as foreign direct investment (FDI), Summit said.