Summit, Petrobangla disputing $22m bill
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“disputed invoices” and asked its relevant department to work out if the incident falls under adverse weather conditions (AWC), according to Summit.
As per the contract with Petrobangla, the incident can be classified as an AWC, so the state-owned enterprise is required to pay the full fee due to such kinds of force majeure, Summit said.
In a written reply to The Daily Star, Summit said it is standard industry practice for fees to remain payable by the customer (Petrobangla) during certain force majeure events.
The terminal use agreement (TUA) between Summit and Petrobangla also stipulates the same.
Section 24.5 of the TUA states that fees remain payable during a force majeure affecting the customer, a political force majeure event, during any period where the terminal’s performance is adversely affected by AWC and during a force majeure event affecting the terminal, Summit said.
“Therefore, Summit is of the view that Petrobangla is under an obligation to pay against the monthly invoices raised during the force majeure period as per the TUA,” they added.
Petrobangla chairman Zanendra Nath Sarker did not respond to The Daily Star’s request for comment.
Md Rafiqul Islam, the managing director of Rupantarita Prakritik Gas Company Limited, the company under Petrobangla involved with the LNG import, refused to comment on this as it is a legal issue.
“It will be solved under legal proceedings as per the agreements,” he said.
Meanwhile, the IEEFA has called into question the financial case for having FSRUs in a country like Bangladesh.
None of Asia’s largest LNG importers -- including mainland China, Japan, South Korea, India, Taiwan and Thailand -- have FSRUs, the note said, adding that the world’s largest LNG importer China stopped using them in 2016 due to higher costs.
In Japan, the world’s second-largest buyer, harsh oceanic conditions limit their potential.
Taiwan and India are still pursuing FSRU projects despite challenging metocean conditions, while Thailand has shelved three FSRU projects, according to data from Global Energy Monitor.
The high operating costs of floating terminals can become more expensive than onshore configurations over time and are often unable to operate during periods of intense weather, the IEEFA said.
“These risks are especially crucial for developing countries in South and Southeast Asia that are highly exposed to climate change, as stronger and more harmful weather events increasingly threaten the reliability of offshore projects.”
Though the FSRUs are particularly attractive for emerging markets due to faster lead times and lower capital costs, those face higher operating costs than onshore facilities.
For example, the charter rates for FSRU vessels typically range from $29-$44 million a year, and a recently terminated FSRU project in Bangladesh came with an annual fee of $110 million.
Onshore terminals can be cheaper than FSRUs after six to seven years of operation, the IEEFA said citing Wartsila, a maritime energy technology group.