Summit seeks FSRU deal reconsidered

Summit LNG Terminal II Co. Ltd. (SLNG II), a subsidiary of the Summit Group, has written to Petrobangla asking the state hydrocarbons agency to reconsider the termination of what would have been its second floating storage and regasification unit (FSRU) project, citing potential savings of $1.1 billion for the exchequer, apart from major gains in terms of energy security.

Petrobangla spokesman Tariqul Islam Khan told Platts, a publication focused on the energy industry, that Summit made the request in a letter sent to Petrobangla on September 6.

The Financial Express first reported the development on September 7.
Under SLNG II’s proposed build, own, operate and transfer (BOOT) model, Petrobangla would take full ownership of the FSRU, mooring system and subsea pipeline after 15 years at no cost, Summit said in the letter seen by Platts.

In contrast, the alternative build, own and operate (BOO) model currently under consideration would leave Petrobangla without ownership of the facilities, resulting in an estimated economic loss of $883 million, Summit’s letter said.

It is understood this is a reference to the proposal from China National Energy Engineering & Construction Co (CNEE), which received a cabinet committee’s in-principle approval on July 28, as the country was plunged into an energy crisis.

Summit’s letter also pointed to differences in charter costs. The currently proposed third FSRU (with CNEE) under the BOO model is expected to cost $342,000 per day, the letter noted, compared with $300,000 per day under the Summit LNG II project.

The difference would amount to savings of around $230 million over 15 years, according to Summit. It also said the project is already at an advanced stage, with $20 million invested, necessary surveys completed and critical equipment procured.

Summit Oil & Shipping Co. Ltd. also has one of the lowest-priced LNG supply agreements with Petrobangla, under which it would supply 1.5 million metric tonnes of LNG annually to the national grid, from diversified sources, including the United States, Australia, Mozambique and Canada.

 According to Summit, such a diversified sourcing strategy would reduce Bangladesh’s exposure to supply disruptions from countries in West Asia (Middle East).

 The company has requested immediate reinstatement of the FSRU agreement, which was torn up by the interim government within just two months of coming to office in October 2024. It also asked for permission to proceed with the project, insisting it would provide both economic and strategic benefits for Bangladesh’s energy security.

“We are waiting for a response from the government,” the corporate department of SLNG II told Platts when contacted.
 SLNG II was scheduled to build a 4.50 million metric tonnes per year FSRU under the BOOT model by 2026 and operate it for 15 years, Petrobangla’s Tariqul Khan told Platts.�"UNB