Summit Oil, Commonwealth LNG sign deal to supply fuel to Asia

Summit Oil and Shipping Co Ltd (SOSCL) has signed a memorandum of understanding with Commonwealth LNG to collaborate in the supply of liquefied natural gas to Asia.

The signing ceremony took place at the Bangabandhu Auditorium of the Embassy of Bangladesh in Washington DC in the presence of Dr Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister, Summit said in a statement on Monday.

SOSCL, a part of Summit Group, is a private sector importer and supplier of fuel oil to Bangladesh.

Under the agreement, SOSCL can potentially contract for 1 million tonnes per year or MTPA of LNG offtake for up to 20 years from Commonwealth’s 8.4 MTPA facility.

LNG drawn from the export terminal, which is currently under development in Cameron, Louisiana will also be supplied to Bangladesh.

Dr Tawfiq-e-Elahi Chowdhury underscored the importance of ensuring access to energy sources to support the economic development related activities in Bangladesh.

He welcomed it as an important step in expanding the energy cooperation between Bangladesh and the United States, it added.

The rest of the press release is as follows:

SOSCL’s associated companies within Summit Group have approximately 3 GW of gas-to-power electricity in operation or development within the Indian subcontinent, and operate a 500 mmcf/d floating storage and regasification unit (FSRU) and LNG terminal under Summit LNG Terminal Co (Pvt) Ltd in Moheshkhali, Cox’s Bazar.

“We’re proud of what this step means towards securing this major source of clean energy for the growing economy of Bangladesh,” said Farid Khan, vice chairman of Summit Group.

“We look forward to having Commonwealth LNG as a partner that can deliver US-sourced LNG, providing diversification of supply for Bangladesh and the pricing stability associated with Henry Hub.”

From Commonwealth LNG’s perspective, President and CEO Paul Varello said the MOU is evidence of just how aligned the parties are in achieving their shared objectives.

“Commonwealth’s focus on producing the lowest-cost liquefaction in the US remains important in a highly competitive global market,” said Varello. “This becomes even more critical for a rapidly emerging economy such as Bangladesh where the need for additional energy is critical for sustaining its economic growth. Summit has recognised that need and Commonwealth LNG looks forward to partnering in these efforts.”

Commonwealth is implementing an accelerated construction schedule that will allow the project to be built in three years using a predominantly modular approach with major components being fabricated offsite.