Excelerate Energy Bangladesh Ltd (EEBL) has claimed 'force majeure' as it justifies its 'failure' to initiate supplying re-gasified LNG (liquefied natural gas) to consumers in time, said officials.
Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties prevents one or both parties from fulfilling their obligations under the contract.
The US-based company's floating, storage, and re-gasification unit (FSRU) has remained stranded for over the past three months in the Bay of Bengal, carrying Qatari LNG.
But the vessel has not started supplying re-gasified LNG yet as it could not be tied up with sub-sea pipeline.
The vessel arrived at the Moheshkhali LNG terminal on April 24 carrying 136,009 cubic metres of Qatari RasGas's fuel marking Bangladesh as the country joining the rank of an LNG importer.
The FSRU has been moored on the Moheshkhali Island, near the port of Chattogram having the capacity of re-gasifying 3.75 million tonnes per year.
It was supposed to start supplying re-gasified LNG to gas transmission pipeline for consumption by clients of the port city Chattogram on May 07, said the official.
But the 'complexities' in tying up the FSRU with subsea pipeline and its 'synchronisation' have held up the supply of re-gasified LNG to consumers since then.
But state-owned Petrobangla has rejected the Excelerate's force majeure claim, he added.
Top officials of state-run Petrobangla and the Energy and Mineral Resources Division announced at least four separate dates for initiating the supply of re-gasified LNG as the Excelerate was trying to resolve it time to time.
But the FSRU could not to be tied up, or plugged-up, with the sub-sea pipeline yet due to rough weather in the sea, insiders said.
If the wave-height in the Bay of Bengal could be within 1.0 meter, the FSRU could easily be tied up and synchronised with the sub-sea pipeline, an engineer involved with the job told this correspondent requesting anonymity.
But currently, the sea wave-height is 2.0 metre and above, he added.
Both Excelerate and Bangladesh are on the losing side as the US firm has been counting cargo rent and other relevant operational costs, while Bangladesh's industrial output is being hampered due to non-supply of re-gasified LNG to its gas-hungry consumers in time, he added.
"Excelerate will try again to fix it up on August 01," said the official.
But industry insiders said even if the tying up and synchronisation is completed, the FSRU's full capacity re-gasified LNG could not be supplied as the construction of necessary pipeline was not completed as yet.
The FSRU might be able to evacuate only around 250 million cubic feet per day (mmcfd), or half the FSRU's re-gasifying capacity from the day one.
The construction of a 30-kilometre and 42-inch diameter Anwara-Fouzdarhat gas transmission pipeline seems to be the major hurdle in transmitting the re-gasified LNG, he added.
A 91 km (56 mile) 30-inch natural gas pipeline from Moheshkhali to Anowara has, however, been completed much earlier and undergone the necessary testing to carry initially re-gasified LNG to Chattogram consumers.
Petrobangla signed 'terminal use agreement' and 'implementation agreement' with the US firm on the LNG terminal project, 'Moheshkhali Floating LNG Terminal,' in July, 2017.
Excelerate built the re-gasification unit on the build, own, operate and transfer (BOOT) basis, he said.
It would charge US$ 0.49 per Mcf (1,000 cubic feet) against its service from the day one.
Petrobangla would buy re-gasified LNG from the terminal on the take-or-pay basis as per the contract.
