Despite seeking expression of interest (EoI) for importing liquefied natural gas (LNG), the state-run Petrobangla recently signed a memorandum of understanding (MoU) with a foreign company, contradicting their earlier move.
On June 13, Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) signed the MoU with Switzerland-based AOT Energy. Now, Petrobangla and AOT are negotiating to seal a final deal.
On June 8, state-owned Rupantarita Praktritik Gas Company Ltd (RPGCL), a subsidiary of Petrobangla, invited EoI from international bidders to shortlist potential suppliers for LNG receiving terminal, on a spot basis. The EoI submission deadline is July 30.
When contacted, RPGCL Managing Director Engr Md Quamruzzaman said: “The government has taken a decision to import LNG to meet future growth in demand.”
But with the EoI submission process still ongoing, the state-run agency inked the MoU.
Generally, an organisation is selected after the interested companies submit their EoI and the authorities concerned evaluate their capability and negotiate with them.
Bypassing the regular process, experts say the MoU was not acceptable as it did not fall under the relevant rules.
They said the signing would have been acceptable if it was done through the normal process.
According to the Public Procurement Act, tender was invited to buy products worth over Tk2 crore for the government.
But the MoU was sealed bypassing the act and under the special the Speedy Supply of Power and Energy (Special Provision) Act-2010 because no government agency or company can do so directly with any foreign company.
“The government is not doing anything right relating to the energy sector. It is not even clear yet as to what impact the country’s local market will face if LNG is imported,” Energy Adviser to Consumers Association of Bangladesh (CAB) Prof M Shamsul Alam told the Dhaka Tribune.
“We are concerned about it,” he added.
Any product can be imported under government-to-government (G2G) process without inviting any tender or EoI.
Petrobangla had inked an MoU with Qatar in January 2011 to import around 4 million tonnes of LNG annually under the G2G arrangement.
It later extended the deadline of the MoU several times due to delay in work of setting up LNG import terminal.
Petrobangla, a government entity has signed terminal use agreement with US firm Excelerate Energy (EE) and local conglomerate Summit LNG terminal company to install floating storage and re-gasificaiton unit (FSRU) based LNG terminal in Moheshkhali, Cox’s Bazar. The Excelerate Energy terminal is scheduled to be commissioned by April 2018 and the Summit Terminal by October 2018.
Besides, Petrobangla has signed MoU with other terminal developers to expand it’s LNG storage and regas capacity in the long run.
Bangladesh is now reeling from natural gas shortage with daily average output of around 2,700 mmcfd of gas against the demand for over 3,500 mmcfd, according to Petrobangla.