Bangladesh cancels LNG terminal, supply contract with Summit Group

DHAKA/SINGAPORE, Oct 8 (Reuters) - Bangladesh has terminated its agreement with domestic conglomerate Summit Group to build a second floating liquefied natural gas (LNG) terminal in the country, the company said.

Summit received a termination notice for the development on Monday evening, it said in a statement to Reuters sent late on Monday.

Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. ngc.co.tt

The LNG import terminal would have been Bangladesh's third and was estimated to have been operational by the second quarter of 2026.

Summit operates one of Bangladesh's two LNG import terminals. 

The cancellation follows a recommendation from a government committee earlier this month to void the contract, which was signed in March under a law that was meant to ensure uninterrupted power supply for the country but which critics say was not a transparent process.

Summit said in its statement it has a proven track record of developing long-term infrastructure projects in Bangladesh in a responsible and transparent manner 

"We believe this is unjustified and will appeal for review," the company said.

An official from state-owned energy company Petrobangla, who asked to remain unidentified because they are not authorised to speak to the media, confirmed the Summit deal had been cancelled. 

The cancellation of Summit's contract will also end a 15-year LNG supply agreement tied to the terminal's construction, the Petrobangla official said.

Muhammad Fouzul Kabir Khan, the power and energy adviser to the government, did not immediately reply when contacted for a response on the cancellation.

Bangladesh's interim government led by Nobel Peace Prize winner Muhammad Yunus, which came to power after widespread protests forced the resignation of Prime Minister Sheikh Hasina, raised concerns over the financial risks associated with agreements like the one with Summit.

Last month, Petrobangla began issuing tenders to buy spot LNG cargoes from the international market via an open tender process rather than a private tender. 

(Reporting by Emily Chow in Singapore and Ruma Paul in Dhaka; Editing by Christian Schmollinger)