Summit LNG Terminal II Co Ltd (SLNG II) has urged Petrobangla and the government to reconsider the cancellation of its second floating storage and regasification unit (FSRU) project, claiming the deal could save Bangladesh about $1.1 billion and strengthen the country's energy security.

Sources in the Petrobangla confirmed the development, saying no decision has yet been taken on Summit's request.

In a letter sent to Petrobangla on Sept 6, SLNG II said the project was structured under a build, own, operate and transfer (BOOT) model, under which Petrobangla would receive ownership of the FSRU, mooring system and subsea pipeline at no cost after 15 years of operation.

Summit said an alternative build, own and operate (BOO) arrangement currently under consideration would leave Petrobangla without ownership of the assets, resulting in an estimated economic loss of $883 million.

The company also pointed to differences in daily charter costs. It said the proposed third FSRU under the BOO model would cost about $342,000 per day, while its FSRU under the existing arrangement would cost $300,000 per day.

According to Summit, the difference of $42,000 a day would save Bangladesh about $230 million over 15 years.

The company said the project was already at an advanced stage, with around $20 million invested, required surveys completed and critical equipment procured.

Summit also cited its LNG supply arrangement with Petrobangla as another advantage. Summit Oil and Shipping Co Ltd has an agreement to supply 1.5 million metric tonnes of LNG a year from diversified sources, including the United States, Australia, Mozambique and Canada, according to the letter.

Summit said the arrangement would reduce Bangladesh's exposure to supply disruptions linked to geopolitical tensions in the Middle East.

The company has requested immediate reinstatement of the FSRU deal and permission to proceed with the project, saying this would provide economic and strategic benefits for Bangladesh.

Petrobangla cancelled the Terminal Use Agreement and Implementation Agreement with SLNG II in October 2024 during the interim government's tenure.

SLNG II, a subsidiary of Summit Group, was supposed to build a 4.50 million metric tonnes per year FSRU on a BOOT basis and operate it for 15 years.

Summit had signed agreements in March 2024 to build a 170,000-cubic-metre FSRU with a send-out capacity of 600 million cubic feet per day. The project was planned as Bangladesh's third floating LNG terminal and Summit Group's second FSRU.

The company's existing FSRU, Summit LNG Terminal Co Ltd, has a capacity of 3.75 million metric tonnes per year and is located at Maheshkhali in the Bay of Bengal. It began commercial operations on April 30, 2019, and is scheduled to remain operational for 15 years under its existing contracts.

The interim government later cancelled the FSRU-3 contract with Summit Group. The agreement had been signed by the previous Awami League government under a special law without a tender process.

The Cabinet Committee on Public Procurement approved the draft contract for the country's third floating LNG terminal at Maheshkhali in Cox's Bazar on Dec 6, 2023.

Under the agreement, Summit was to receive a mooring LNGCs, unloading, storing, regasifying and sending out fees of $300000/day.