Govt cancels deal with Summit Group to set up third floating LNG terminal
The agreement was signed in March under a special law without a competitive bidding process
The interim government has cancelled the contract for establishing the floating LNG terminal (FSRU-3) with Summit Group, an agreement that the Awami League government signed on 30 March of this year under a special law without a tender process.
This terminal was set to be Bangladesh's third floating LNG terminal and the second operated by Summit Group. The company's first FSRU (Floating Storage and Regasification Unit) is located in Maheshkhali.
An order signed by Petrobangla Secretary Ruchira Islam has been issued to cancel the special law agreement with Summit Group.
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On 6 December 2023, the Cabinet Committee on Public Procurement had approved the draft contract for the country's third floating LNG terminal at Maheshkhali in Cox's Bazar.
As per the agreement, Summit Group was set to receive regasification charges of $3 lakh per day (equivalent to Tk3.31 crore at the exchange rate stated in the contract) for 15 years from the terminal's commissioning.
According to Summit's official statement, the group has a proven track record of developing long-term infrastructure projects in Bangladesh responsibly and transparently.
"We can confirm that Summit executed the Terminal Use Agreement (TUA) and Implementation Agreement (IA) for its second Floating Storage and Regasification Unit (FSRU) project with Petrobangla and the Government of Bangladesh on March 30, 2024, and signed the Sale and Purchase Agreement (SPA) with Petrobangla on the same date for the supply of 1.5 million tonnes of LNG per year over a 15-year period, starting in October 2026," the statement reads.
"This evening, we received a termination notice for the FSRU Terminal Use Agreement (TUA). We believe this is unjustified and will appeal for a review," it added.
Recently, Summit chairman Aziz Khan and his family members' bank accounts were frozen by the government due to allegations of various irregularities and corruption.
