Summit Group Urges Government of Bangladesh to Reverse Decision to Terminate FSRU Project

Dhaka & Singapore, Oct 8, 2024 - ( JCN Newswire ) - Summit LNG Terminal II Co Ltd ("SLNG II"), a unit of Summit Group, has urged the Government of Bangladesh to reverse its decision to terminate the third Floating Storage and Regasification Unit ("FSRU") project in the country.

SLNG II said it had received a notice from the Bangladesh Oil, Gas & Mineral Corporation ("Petrobangla") on 7 October notifying the termination of the project situated at Moheshkhali in Cox's Bazar.

The Moheshkhali terminal ("2nd FSRU") in southeast Bangladesh is the second floating gas terminal project undertaken by Summit Group with a planned regasification capacity of 600 million standard cubic feet per day.

In response to media queries, SLNG II wishes to clarify the following:

1) In late 2020, the Government of Bangladesh made a strategic decision to transition from coal-fired power generation to natural gas, a cleaner energy source. The initiative was also aimed at boosting gas supply to ensure energy security and support industrial growth. Summit Group submitted a proposal on 11 October 2021, to implement a FSRU on a Build, Own, Operate, and Transfer (BOOT) basis. The proposal was approved by the Cabinet Committee on Economic Affairs on 14 June 2023.

The approval followed two years of extensive negotiations and consultations with international law firms to address the contractual and technical challenges.

2) Summit, in collaboration with Petrobangla and Rupantarita Prakritik Gas Company Limited ("RPGCL"), finalized the Terminal Use Agreement ("TUA") and Implementation Agreement ("IA") on 12 October 2023. These were legally vetted and approved by the Cabinet Committee on 12 December 2023.

3) SLNG II signed the TUA and IA on 30 March 2024 with Petrobangla and Government of Bangladesh ("GoB") for the 2nd FSRU. On the same day SLNG II also signed a long-term Sale and Purchase Agreement ("SPA") to supply 1.5 million tonnes of liquefied natural gas ("LNG") to Petrobangla, starting in October 2026.

4) To fulfil the initial conditions precedent ("CPs") of the agreements signed on 30 March 2024, SLNG II has to date committed investments of approximately USD 15 million to implement the 2nd FSRU.

5) The termination notice received on 7 October 2024 was issued on the basis that the agreements signed on 30 March 2024 had not become effective as a performance bond was not submitted within 90 days as stipulated, i.e. on 28 June 2024. SLNG II said that as that date fell on a Friday (not a banking day in Bangladesh), the performance bond was delivered on the next possible working day, with acknowledgement by Petrobangla.

6) SLNG II's lawyers have confirmed that SLNG II had not breached any CPs of the agreements of 30 March 2024. Even if any CP was delayed, Petrobangla did not notify SLNG II within the agreed 30-day window and had therefore deemed the CP as accepted.

"SLNG II is owned by Summit Power International Limited ("SPIL"), the largest private sector investor in energy in Bangladesh with a proven track record of developing long-term infrastructure projects in a responsible and transparent manner. SPIL has stated that our investments have helped to catalyse foreign direct investment ("FDI") into Bangladesh.

We respectfully urge the Government of Bangladesh to uphold the sanctity of contracts and to ensure that investors' rights are protected and treated fairly and equitably," SPIL said.

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