Govt to sign new deals with Summit Group, Excelerate Energy to get long-term LNG supply

The government is going to sign new deals with Summit Group and Excelerate Energy to get supply of LNG on a long term basis beyond their existing contracts as LNG terminal service providers.

The Cabinet Committee on Economic Affairs at a meeting on Wednesday approved two separate proposals in principle, placed by Energy and Mineral Resources on behalf of the Petrobangla.

Finance Minister AHM Mustafa Kamal presided over the virtual meeting.

As per a proposal, the Excelerate Energy Bangladesh Ltd, which set up a floating terminal and re-gasification unit (FSRU) at Moheshkhali in Cox's Bazar, will supply 1 to 1.5 million tonnes per annum (MTPA) of LNG from 2026 for a period of 15 years under a long term contract.

Under a similar proposal, Summit Oil & Shipping Co Ltd, a subsidiary of the Summit Group, which established a FSRU at Moheshkhali in Cox's Bazar, will supply 1.5 MTPA of LNG from 2026 for a period of 15 years under a long-term contract.

Cabinet Division Additional Secretary Md Aminul Ahsan, who briefed reporters about the Cabinet body's meeting outcomes, did not disclose any detail of the offers of Summit and Excelerate Energy, specially the rate of LNG.

"You will learn about the rates of LNG when they come to the Cabinet Committee on Government Purchase (CCGP) for final approval," he told reporters.

Currently, both the Excelerate Energy and Summit have been providing the FSRU service to the government since 2018 and 2019 respectively to re-gasify the LNG imported by the Petrobangla from Qatar and Oman.

The two companies have been pursuing the government to set up another two FSRU, one at Moheshkhali by Summit, another at Payra of Patuakhali.

The Summit Group has received the in-principle approval of the Cabinet Committee on Economic Affairs to set up the second FSRU at Moheshkhali while the US-based Excelerate Energy's offer is waiting to receive the similar approval.

Bangladesh has been desperately looking for LNG imports to meet its growing demand for natural gas.

Petrobangla has been supplying 3000 MMCFD gas of which about 2300 MMCFD is locally produced of which 700 MMCFD is imported.

As a result, the country is experiencing a huge shortfall of about 1000 million cubic feet per day (MMCFD) gas to meet the demand for 4000 MMCFD.

Recently, Petrobangla signed two new deals with Qatar and Oman to receive more LNG supply from 2026 beyond the two existing deals with the two nations.

Meanwhile, the Cabinet Economic Affairs body approved in-principle a proposal of the Bangladesh Power Development Board (BPDB) to receive the repair service for its damaged compressor of Gas Turbine of Ghorashal 3rd Unit Re-Powered Combined Cycle Power Plant from the main manufacturer of Electric (Switzerland) GmbH under the direct procurement method (DPM).

The Cabinet body also approved another proposal in-principle to implement the project 'Construction, Operation and Maintenance of Water Treatment Plant at Purbachal New Town' of the Rajdhani Unnayan Kartipakkhay (Rajuk) under the public private partnership (PPP).

The Rajuk has taken up the project for constructing an environment-friendly and sustainable sewage system in Purbachal New Town.