Summit shut down the LNG re-gasification operations on Thursday morning as its floating storage and re-gasification unit (FSRU) was reportedly hit and damaged by a floating broken stray pontoon amid the cyclone Remal mayhem.
The incident resulted in a 40-percent cut in re-gasification of liquefied natural gas (LNG) to 600 mmcfd on the day from the previous day's 1.0 Bcfd, according to Petrobangla sources.
Sector insiders apprehended that Petrobangla might have to ration gas supplies to industries and power plants while state-run Bangladesh Power Development Board (BPDB) would have to rely more on oil-fired power plants to cope with the gas crisis.
The authorities spotted the damage Wednesday night and subsequently started reducing the re-gasification and completely shut it on Thursday morning, said a Petrobangla official.
Summit has also notified the Rupantarita Prakritik Gas Company Ltd (RPGCL), which oversees LNG trading in Bangladesh, about the incident and its intention to inspect in detail the extent of damage, said a senior RPGCL official.
Neither the full extent of damage nor the source of the stray pontoon could be detected immediately, said an official.
According to Petrobangla sources, the country's overall natural gas output dropped by around 16.13 per cent to around 2.60 billion cubic feet per day (Bcfd), including 600 million cubic feet per day (mmcfd) of RLNG, from the pre-cyclone period's 3.10 Bcfd when LNG re-gasification reached all time high at 1.10 Bcfd.
Sources said the LNG re-gasification came down to around 320 mmcfd during the cyclone Remal, but increased gradually to around 1.0 Bcfd on Wednesday night following the landfall of the cyclone, according to official data of energy and mineral resources division under the Ministry of Power, Energy and Mineral Resources (MPEMR).
Meanwhile, a technical team of Bureau Veritas visited the Summit's FSRU on Thursday to assess the extent of its damage, officials said.
Summit has subsequently sought to apply the force-majeure provision to avoid counting any demurrage or penalty resulting from the technical glitch.
It wrote a letter to RPGCL, a wholly owned subsidiary of Petrobangla, regarding the force-majeure, the RPGCL official said.
Force majeure is a common contractual clause that relieves both parties from liability or obligation when an extraordinary event or circ*mstance beyond their control, such as war, strike, riot, crime, epidemic, or sudden legal change, prevents one or both parties from fulfilling their obligations.
When contacted, general manager of public relations & media at Summit Corporation Ltd Mohsena Hassan said: "On May 27, 2024, during the peak of cyclone Remal, a stray broken floating pontoon hit Summit's FSRU in Moheshkhali, Cox's Bazar. There was damage to the ballast water tank of the FSRU. As per the standard operational protocol, Summit has flown in an expert surveyor who is boarding the vessel shortly. Based on the surveyor's full assessment of the situation, we would be able to share further details."
Summit is in close communications with the RPGCL and Petrobangla, the official statement noted regarding the Summit FSRU's operational pause.
"Due to the sensitive and explosive nature of handling LNG and national importance of FSRU in terms of gas supply to the national grid, Summit is taking full precaution in rectifying the matter before resuming normal operations," it added.
A senior RPGCL official said, "We cannot say at this moment when the damaged FSRU will come online again."
It could, however, come online after fixing the damage following the inspection, he added.
If fixing the technical glitch takes several days or more, the RPGCL might have to defer arrival of the upcoming LNG cargoes, the official expressed the fear.
US's Excelerate Energy-owned FSRU - Excellence - which ramped up its re-gasification capacity to 600 mmcfd is currently the lone operational FSRU in Bangladesh.
Unlike the previous cyclone 'Mocha' (May 2023), the authorities this time had instructed the FSRUs to keep tied with the mooring facility as the cyclone Remal's hitting zone was located away from the Moheshkhali island.
During cyclone Mocha mayhem last year Bangladesh LNG facilities had to cease operations, including two FSRUs, as preparations, which had triggered an acute power and gas crisis, hampering businesses across the country.
Bangladesh's two FSRUs owned by Summit Group and US-based Excelerate Energy were both taken offline on May 12 as a precautionary measure to avoid any damage from cyclone Mocha, which hit Bangladesh and Myanmar on the afternoon of May 14.
Summit LNG remained tied to its mooring system in the morning and restarted supply of re-gasified LNG on the afternoon of May 15, Petrobangla chairman Zanendra Nath Sarker said then.
The FSRU Excellence, which was moved further out to sea to avoid the full impact of the cyclone, came online on May 20 after an eight day hiatus following its departure to deep sea, after de-plugging of mooring to prepare for cyclone Mocha, he said.
To tie up its FSRU to the mooring system and resume LNG re-gasification, Excelerate Energy had to fly in technical experts from Belgium.
To avoid any demurrage or penalty resulting from the late unloading of LNG cargoes from suppliers during the cyclone Mocha alert period, Bangladesh had sought to apply the force-majeure provision.
Petrobangla had to reschedule the delivery of at least five LNG cargoes when the country's floating LNG terminals were shut then.
Bangladesh had to defer deliveries of LNG cargoes from both long-term suppliers along with spot suppliers last year in the aftermath of cyclone Mocha mayhem.
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