Petrobangla to renegotiate two new FSRU terminal projects

Bangladesh state-owned energy company, Petrobangla faces uncertainty about how to proceed with a?new bidding process for establishing two private sector LNG terminals, recently cancelled by the interim?government.?

Petrobangla officials revealed to local media that the company was unclear whether to follow Bangladesh’s Public Procurement Rule (PPR) 2008 to invite a tender for the two projects or to consult the Public-Private Partnership (PPP) office for implementation.

Regarding the two cancelled projects, Petrobangla had signed a contract with Summit Group?for one terminal, while a Memorandum of Understanding (MoU) had been signed with US-based Excelerate Energy for the other under the previous Awami League government.

However, upon taking office, the interim government’s Adviser for the Power, Energy, and Mineral Resources Ministry directed Petrobangla to cancel both?projects.

These projects were in addition to two existing FSRUs, acting as LNG terminals in Maheshkhali and established within the private sector under the same Special Provision Act of 2010 without a tender process.

Through these two terminals, Petrobangla has been supplying roughly 1,100 mill cu ft per day of gas to the national grid by?importing LNG from overseas?suppliers.

Bangladesh’s current daily gas production stands at about 3,100 mill cu ft, including 1,100 mill from imported LNG, against a demand of around 4,000 mill cu ft.

Under the previous government’s agreements, both the companies selected, Excelerate and Summit Group, secured billion-dollar annual contracts to provide LNG regasification services.

However, the new interim administration decided to cancel the projects, aiming to re-award them through a more transparent and competitive bidding process.

"We are still evaluating both legal frameworks to determine which one to follow," Petrobangla Chairman, Zanendra Nath Sarker, told the media. “A renowned procurement expert is also assisting us in this matter.”

He mentioned that once the tender process is clarified, Petrobangla intends to release an open tender for the LNG terminal projects. He acknowledged that Petrobangla faced difficulties since no previous project in the private sector had been implemented through an open tender.?