Petrobangla – the Bangladesh Oil, Gas and Minerals Corporation – is facing uncertainty over how to proceed with a new tender process to set up two private sector LNG terminals recently canceled by the caretaker government.

Petrobangla officials revealed that they remain unclear whether to follow the Public Procurement Regulation (PPR) 2008 to invite tender for the two projects or consult the Public-Private Partnership (PPP) office for implementation.

Of the two canceled projects, Petrobangla signed a contract with Summit Group for one terminal, while a Memorandum of Understanding (MoU) had been signed with US-based Excelerate Energy for the other under the previous Awami League government.

However, upon assuming office, the caretaker government adviser to the Ministry of Power, Energy and Mineral Resources ordered Petrobangla to cancel both projects.

The contracts were awarded to private sponsors under the Rapid Growth of Power and Energy Supply (Special Provision) Act 2010 without any tender.

These canceled projects are in addition to two floating storage and regasification units (FSRUs), commonly known as LNG terminals, located in Maheshkhali and set up in the private sector under the same Special Provisions Act of 2010, also without a process of auction.

US-based Excelerate established the first terminal in Moheshkhali in 2018 with a capacity of 600 million cubic feet per day (MMCFD) of gas.

Local firm Summit Group developed the second terminal in 2019, also in Moheshkhali, with a capacity of 500 MMCFD.

Through these two terminals, Petrobangla has supplied approximately 1,100 MMCFD of gas to the national grid by importing LNG from abroad.

Bangladesh’s current daily gas production is around 3,100 MMCFD, including 1,100 MMCFD from imported LNG, against a demand of around 4,000 MMCFD.

To meet the growing demand, the previous Awami League government initiated plans to set up two additional LNG terminals with similar capacities, awarding contracts to the same private sponsors, Excelerate Energy and Summit Group.

Under these agreements, both Excelerate and Summit Group have secured billion-dollar annual contracts to provide LNG regasification services.

However, following the departure of the previous government, the interim administration decided to cancel the projects, aiming to re-award them through a more transparent and competitive bidding process.

Petrobangla later faced uncertainty in launching a new bidding process for the two LNG terminal projects.

The issue is whether to proceed with the Public Procurement Rule (PPR) 2008 or to follow the Public Private Partnership (PPP) framework.

“We are still evaluating both legal frameworks to determine which one to pursue,” Petrobangla chairman Zanendra Nath Sarker told UNB.

“A renowned procurement expert is also helping us in this matter,” he said.

He noted that once the bidding process is clarified, Petrobangla plans to launch an open tender for the LNG terminal projects.

The President admitted that Petrobangla is facing difficulties as no previous private sector project has been implemented through an open tender.