Energy Bangla

Energy electricity and environment news portal

Dhaka Thursday,  Mar 28, 2024

LNG Terminal: US firm likely to get contract without bid bond

The energy division on 18 November approved a proposal of a US firm for setting up an LNG terminal at Moheshkhali in the Bay of Bengal waiving a condition of paying the bid bond and allowing it to pay 41.5 per cent less performance guarantee, officials said.The decisions came from a meeting headed by the energy division secretary Md Mozammel Haque Khan.

According to the bid document, the US firm Astra Oil and Excelerate Energy is supposed to pay $20m in performance guarantee, 10 per cent of the investment to the project, they said.
Earlier, Astra quoted in its proposal that it would need to invest about $200m for setting up the terminal but agreed to pay $11.7 million in performance guarantee.
Petrobangla chairman Hossain Monsur told that Astra was in a bidding process with Petrobangla for implementing the project.But since there was a few deviations from the bid conditions in the Astra’s proposal, the government would implement the project under Speedy Supply of Power and Energy (Special Provision) (Amendment) Act 2012, he said. ‘Now Petrobangla will ask Astra to attend a meeting with it scrutinise the deviations and finalise the draft contract. Then the proposal will be sent for the approval of the committee under the special act,’ Monsur Said.
Petrobangla will finally need approval of law ministry and then the government purchase committee before signing contract with the firm.
A Petrobangla official said that Astra was yet to arrange financing for the project which led the firm to submit the proposal with $11.7m performance guarantee and without the commitment of paying bid bond.
According to the proposal, Astra will realise $0.39 for processing 1,000 cubic feet of imported LNG into natural gas for 15 years.
The project will be implemented on build/own/operate/transfer basis. The US firm will hand over the LNG terminal after realising its capital investment, operation and maintenance cost and profit margin during the 15-year operational period.
In 2011, Petrobangla short-listed four international firms out 10 — Bermuda-based Golar LNG Energy, a joint venture between US-based Astra Oil and Excelerate Energy, South Korea’s Samsung C&T Corporation, and India’s Hiranandani Electricity — and asked them to submit their bids for installation of the floating LNG terminal. But three of the short-listed firms declined responding to Petrobangla’s invitation alleging that the government was biased to the US firm. Earlier, Petrobangla extended the implementation period of the LNG terminal in line with the demand of the short-listed firms.

Comment here