Dhaka: Summit LNG Terminal II Co. Ltd. (SLNG II), a subsidiary of the Summit Group, has urged Petrobangla to reconsider its decision to terminate the second floating storage and regasification unit (FSRU) project. The company emphasized potential savings of $1.1 billion for the national exchequer and significant enhancements in energy security.
According to United News of Bangladesh, Petrobangla's spokesperson, Tariqul Islam Khan, confirmed that Summit made this request through a letter dated September 6. The Financial Express initially reported the development on September 7. SLNG II proposed a model where Petrobangla would assume full ownership of the FSRU, mooring system, and subsea pipeline after 15 years at no cost, contrasting with an alternative model that could result in an economic loss of $883 million.
SLNG II's proposal highlighted differences in charter costs between its project and a competing proposal from China National Energy Engineering and Construction Co (CNEE). The alternative proposal, under a build, own and operate (BOO) model, is projected to cost $342,000 per day, while Summit's plan would cost $300,000 per day, potentially saving $230 million over 15 years.
Summit also noted the project is advanced, with $20 million invested, surveys completed, and critical equipment procured. Additionally, Summit Oil and Shipping Co. Ltd. has a competitive LNG supply agreement with Petrobangla, offering 1.5 million metric tonnes annually from sources like the United States, Australia, Mozambique, and Canada.
According to Summit, this sourcing strategy would mitigate Bangladesh's exposure to disruptions from West Asia. The company has requested the immediate reinstatement of the FSRU agreement, which was annulled by the interim government two months after taking office in October 2024. Summit insists the project would yield economic and strategic benefits for Bangladesh.
SLNG II was slated to develop a 4.50 million metric tonnes per year FSRU by 2026 under the BOOT model. Summit's existing 3.75 million metric tonnes per year FSRU, operated by Summit LNG Terminal Co. Ltd. on Moheshkhali island, has been operational since April 2019 and will remain so until 2033.