Summit Group is urging the government to reverse its decision to terminate the agreement for its second Floating Storage and Regasification Unit (FSRU) project. The company claims it did not breach any conditions of the contract with Petrobangla.
In a press statement on Wednesday, Summit LNG Terminal II Co Ltd (SLNG II), a subsidiary of Summit Group, revealed that it received a termination notice from Petrobangla on October 7 for the project located in Moheshkhali, Cox's Bazar.
The notice cited that SLNG II failed to submit the performance bond by the deadline of June 28, 2024.
Howver, Summit argues that this date fell on a Friday, a non-banking day in Bangladesh. They assert that the performance bond was delivered on the next working day, and Petrobangla acknowledged receipt.
"Our lawyers confirm that SLNG II has not breached any conditions of the agreements. Even if there were delays, Petrobangla did not notify us within the agreed 30-day window, meaning the conditions were deemed accepted," the statement said.
Summit Group emphasised its status as the largest private sector investor in Bangladesh's energy sector, with a strong history of developing long-term infrastructure projects. They called for the government to uphold contract integrity and ensure fair treatment of investors.
The statement noted that in late 2020, the government decided to transition from coal to natural gas as a cleaner energy source. Following this, Summit submitted a proposal on October 11, 2021, to implement the FSRU on a Build, Own, Operate, and Transfer (BOOT) basis. The proposal received approval on June 14, 2023, after two years of negotiations and consultations.
On March 30, 2024, Summit, Petrobangla, and Rupantarita Prakritik Gas Company Limited (RPGCL) signed the Terminal Use Agreement (TUA) and Implementation Agreement (IA). They also finalised a long-term Sale and Purchase Agreement (SPA) to supply 1.5 million tonnes of LNG annually starting in October 2026.
"To fulfil the initial conditions of the agreements, SLNG II has committed approximately $15 million to develop the country's third FSRU," the press release concluded.
