Excelerate Energy Bangladesh Ltd, which is building the country’s first LNG terminal (FSRU) at the southern island of Maheshkhali, has missed the deadline of May 6 to supply LNG to the national grid line. The company, a subsidiary of the US-based Excelerate Energy, however, does not need to pay any demurrage for missing the deadline, as a tricky bilateral agreement between it and the state-owned energy company Petrobangla gives the firm some leeway.

An Excelerate Energy official told The Independent that they expect to supply the first consignment of LNG to the national grid line on June 12.

Petrobangla signed a terminal-use agreement with Excelerate Energy Bangladesh Ltd to set up the country’s first LNG terminal on March 31, 2016. Under the agreement, the company was supposed to facilitate supplies of LNG to the shore by May 7.

Excelerate Energy officials, however, said that as per the bilateral agreement, they are bound to facilitate supplies of LNG within two months of its financial closing with the International Finance Corporation (IFC), from which it has taken the loan for the project.

The IFC helped arrange the debt financing package of USD 125.7 million for the project, including IFC’s loan of USD 32.8 million from its own account and the balance from the UK-led CDC Group, Germany’s DEG, the Dutch-led Entrepreneurial Development Bank (FMO) and the Japan International Cooperation Agency (JICA).

The company still has a month left under that deadline, and, so, it is not bound to pay any demurrage for missing the earlier deadline, officials explained.

The country’s first FSRU is being established on the build, own, operate and transfer (BOOT) basis, and the operator will also be exempt from tax payments on the income from the project.

The terminal company, however, will have to maintain its accounts properly and submit returns regularly, said the National Board of Revenue (NBR) in a notification on October 30. Under the contract, Excelerate Energy will hand over the terminal to Petrobangla after 15 years of operations.

Habibur Bhuiyan, terminal operation manager of Maheshkhali’s LNG terminal, which in technical terms is known as the floating storage and regasification unit (FSRU), told The Independent that there has been a technical difficulty in bringing the gas to the shore.

An FSRU is a special type of ship used to store and degasify LNG and supply it onshore. The FSRU in Bangladesh has the capacity to hold 138,000 cubic metres and distribute up to 500 million cubic feet per day, officials said.

The ships carrying LNG to Bangladesh will transfer the consignments to this FSRU, which will supply them to the terminal after regasification.

Bhuiyan said once the problem in the seven-kilometre supply line to the shore is fixed, the LNG will be supplied to the national grid via Chattogram’s Anwara.

Rafiqul Islam, general manager of Rupantar Prakritik Gas Company Limited (RPGCL), told The Independent that they expect LNG in the grid line from the second week of June.

According to Petrobangla, on Monday, 2,577mcf gas were supplied against a demand of around 3,700mcf. The government has to limit supplies despite growing demand in industries and households because of the lack of extraction from the gas fields.

The Awami League initiated the LNG terminal project in Maheshkhali when it returned to power in 2009. It could not implement the project on account of different complexities in the first term.

After the party formed the government for the second consecutive term in 2014, it placed this among the priority projects.