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The government plans to appoint an international legal consultant to resolve existing and future disputes involving liquefied natural gas (LNG) contracts.
The consultant will also provide legal advice on finalising terminal use agreements (TUAs), LNG sales and purchase agreements (SPAs), and implementation agreements (IAs) between state-run Petrobangla or the government and relevant parties.
Rupantarita Prakritik Gas Company Ltd (RPGCL), a subsidiary of Petrobangla, has floated a tender seeking expression of interest from qualified candidates. The deadline for submission is November 11.
Although the tender does not mention it explicitly, RPGCL intends to engage the consultant to assist in handling the legal dispute over the cancellation of Summit Group's floating storage and regasification unit (FSRU) and LNG supply deal, a senior Petrobangla official told The Financial Express on Saturday, requesting anonymity.
Officials said Bangladesh scrapped a 15-year long-term LNG supply contract with local Summit Group in September, several months before its scheduled execution. Petrobangla cancelled the SPA with Summit Oil & Shipping Company Ltd (SOSCL), a Summit subsidiary that was supposed to begin supplying LNG from 2026.
The SOSCL deal was Petrobangla's fourth SPA for long-term LNG procurement signed between mid-2023 and mid-2024. The other SPAs were inked with Qatar Energy Trading LLC, Oman's OQ Trading International, and the US-based Excelerate Gas Marketing Ltd Partnership.
Currently, Qatargas and OQ Trading are supplying LNG to Bangladesh under two long-term SPAs.
The cancellation of Summit's SPA came about a year after Petrobangla terminated its contract with the company for constructing a 4.5-million-tonne-per-year (MTPA) capacity FSRU. Petrobangla formally notified Summit of the termination on October 7, 2024.
The FSRU was to be built by Summit LNG Terminal II Ltd, another Summit subsidiary, on Moheshkhali Island in the Bay of Bengal, where two FSRUs - including one owned by Summit - are already in operation. The cancelled project involved a 170,000-cubic-metre FSRU with a send-out capacity of 600 million cubic feet per day (mmcfd).
Summit's existing 3.75-MTPA regasification unit began commercial operations on April 30, 2019, and is scheduled to remain operational until 2033. The other operational FSRU in Bangladesh, Excellence, is owned by US-based Excelerate Energy and has a 4.5-MTPA capacity.
The prospective legal consultant will also be responsible for drafting, reviewing, negotiating, and amending TUAs, re-gasified LNG supply agreements, and related implementation agreements. The consultant will ensure that all agreements align with indicative term sheets, international best practices, and prevailing market standards.
azizjst@yahoo.com