The ousted Awami League government formulated the ‘Gas
Sector Master Plan 2017’ to address the country’s gas crisis. This plan
prioritized LNG imports to address both medium—and long-term issues, aiming for
solutions until 2041. Several domestic and international companies seized the
opportunity presented by this policy. Since 2018, the country has imported at
least BDT 1.5 trillion worth of LNG. Allegations have been made of large
commissions being involved in awarding contracts to these companies.
According to Petrobangla sources, only a few companies
have repeatedly secured contracts for LNG import deals, terminal construction,
regasification, and supplies from the spot market. These companies include the
local Summit Group, the U.S.-based Excelerate Energy, Singapore-based MS Gunvor
and Vitol Asia, Japan’s JERA, and Switzerland’s TotalEnergies Gas and Power.
Among them, the Sheikh Hasina government gave the most prominence to Summit
Group.
Summit Group’s operations in the LNG sector began in 2017
when it signed an agreement with Petrobangla in April of that year. In 2019,
the company secured a 15-year contract for LNG regasification. Summit’s first
LNG terminal, which received approval, will remain operational until 2033. The
previous Awami League government’s decision to build a third LNG terminal also
went to Summit. However, due to the suspension of the special law for quick
enhancement in the energy sector, the terminal’s construction is awaiting
approval from the interim government. If given the green light, Summit will
gain a project worth approximately BDT 170 billion.
According to a reliable source, the decision to award
Summit the contract for the third terminal was made within just two weeks. The
deal was granted without any competition or review, reportedly due to the sole
decision and pressure from Sheikh Hasina’s energy adviser, Dr. Tawfiq-e-Elahi
Chowdhury. If the interim government approves the construction, Summit will
control a significant portion of the country’s gas supply. Beyond the LNG
sector, the company also dominates the power sector. Summit accounts for 7
percent of the country’s total installed electricity capacity; in the private
sector alone, it controls 17 percent.
Summit Group’s journey in Bangladesh’s power sector began
in 1996, during the Awami League government when the company secured full
ownership of a private power plant. Upon the Awami League’s return to power, a
special provision in 2010 granted indemnity in power and energy matters,
leading to Summit acquiring multiple power plants. Currently, the group has
power plants with a combined capacity of 1,500 megawatts.
Despite starting in Bangladesh’s power and energy
sectors, Summit’s primary business interests are now in Singapore. Allegations
have surfaced that Summit Group Chairman Muhammad Aziz Khan used profits from
the power sector to build his international ventures. He is currently the 41st
wealthiest person in Singapore. According to Forbes magazine’s 2023 data, his
net worth is $1.12 billion, or approximately BDT 130 billion.
The country currently has two LNG terminals with a
capacity of 1,100 million cubic feet. One of these terminals is operated by
Summit Group, while the other is managed by the U.S. company Excelerate Energy.
A fourth LNG terminal was planned during the previous government’s tenure, and
Excelerate was expected to receive the contract. However, the construction deal
was never finalized. Excelerate Energy has also secured a 15-year contract to
supply LNG to Bangladesh, signing an agreement with Petrobangla last November.
The government is importing LNG under long-term contracts
from Qatar and Oman. Additionally, Petrobangla purchases LNG from the spot
market. A handful of companies from Singapore, Japan, Switzerland, and the U.S.
have secured the bulk of these contracts. However, Petrobangla has signed a
Master Sale and Purchase Agreement (MSPA) with 23 companies for LNG imports.
Allegations suggest that the government’s higher-ups have
always approved LNG imports from the spot market, often awarding contracts to
specific companies through commission deals. Even Vitol Asia, which operates in
Bangladesh, has been blacklisted in the U.S. after being found guilty of corruption.
Some ministry officials have indicated that former State Minister for Energy
Nasrul Hamid’s relative is the local agent for the Singapore-based company.
Energy experts say that Bangladesh’s plan to import LNG
dates back to around 2012 when the Chattogram region faced severe gas
shortages. As gas production began to decline around 2015, the Awami League
government commissioned a master plan for the sector in 2017 through
Denmark-based consulting firm Ramboll. This plan projected that by 2021-2030,
Bangladesh would need to import 4,000 million cubic feet (MMcf) of LNG daily to
meet growing demand. This plan created significant opportunities for both local
and international companies.
As domestic gas exploration slowed, the Awami League
government turned to LNG imports, initiating the process in 2018. Under special
law, contracts for LNG terminal construction were awarded to U.S. company
Excelerate Energy and local giant Summit without issuing tenders. Sources
indicate that the terms for terminal construction and regasification charges
were set under directives from top government officials during Sheikh Hasina’s
tenure.
Speaking anonymously, two former senior officials from
the Energy Division and Petrobangla said that an extensive network of government
officials and business elites facilitated the LNG import process while
discouraging local gas exploration. To justify LNG imports, the cost of
purchasing rigs for exploration and the risk of not finding gas were frequently
emphasized. On the other hand, importing LNG was portrayed as a more secure
option where every dollar spent would yield gas. Taufiq-e-Elahi Chowdhury
closely oversaw the LNG trade and imports. Additionally, the energy and power
sectors saw significant involvement from State Minister Nasrul Hamid and at
least two secretaries from the Power Division.
Mortuza Ahmad, a former Managing Director of BAPEX, told
Bonik Barta, “In the last two decades, no major initiatives were taken for gas
exploration. BAPEX, within its limited capacity, continued working at its
maximum potential. The dependency on imports was portrayed as a major solution
to the crisis. In the 2017 gas master plan, projections on how much LNG needed
to be imported created opportunities for certain business groups. When imports
are prioritized, businesses profit; when businesses profit, special interest
groups benefit because of the commission system.”
Ahmed further highlighted the immense financial burden of
LNG imports over the past five years, which drained significant foreign
currency. He stressed that bringing foreign companies for offshore exploration
would have cost the country nothing. If gas was found, it would result in
significant savings; if not, foreign companies would bear the loss. Yet,
foreign oil and gas companies have not been brought in for onshore work aside
from BAPEX.
Some energy experts oppose the practice of awarding
contracts to only a few companies, stating that it compromises the country’s
energy security. During times of high gas demand, Petrobangla had to accept
mechanical faults from these companies.
Ijaz Hossain, an energy expert and former BUET professor,
stated, “LNG imports were necessary, but if exploration had been properly
conducted, the amount of LNG required could have been much less. Special
treatment was repeatedly given to one or two companies for LNG imports. Why
must the same company be awarded contracts repeatedly? Summit was given two LNG
terminals under special provision. Why is dependency on one company increasing?
If this was done through competition, local or other foreign companies could
have had a chance, and there could have been cost savings, transparency, and
accountability. These decisions, made under the previous government, now create
risks for the country’s energy security.”
To reduce dependence on LNG imports, Petrobangla is
currently implementing a plan to drill 46 wells, which is expected to be
completed by December 2025. However, there are doubts about whether the
expected gas will be extracted. Projects already implemented have not added gas
to the grid as per the targets. Petrobangla has also planned to drill another
100 wells, with an estimated cost of at least BDT 200 billion.
Petrobangla has stated that if 50 wells are drilled and
another 100 wells are completed by 2028, the expected gas output could be
achieved. Additionally, tenders for offshore oil and gas exploration have been
called. If foreign companies respond, gas reserves in the country could
increase, according to Petrobangla.
Petrobangla Chairman Janendra Nath Sarkar told Bonik Barta, “The 50-well drilling project is progressing rapidly. At least 500 million cubic feet of gas will be added to the grid within the specified time. Additionally, the government has undertaken an initiative to drill 100 more wells. If implemented, BAPEX can be utilized to its full potential.”