Govt planning to set up new oil refinery in Payra

After stalling to expand the existing crude oil refinery in the country for years, the government is now planning to establish a second oil refinery near Payra seaport in Patuakhali. Md Mahmud Reza Khan, chairman of Bangladesh Petroleum Corporation (BPC), made the announcement yesterday at a seminar organised by the Energy and Mineral Resources Division at Petrobangla in Dhaka on the occasion of Energy Security Day 2016. Addressing the seminar, Mahmud said the government wants to ensure future energy security with the new refinery. “We have designated 1,000 acres of land near Payra seaport for this project. A strategic oil reserve will also be built there to store oil for emergency use,” he said. The government also plans to build a single point mooring system and a refinery unit in Chittagong, as well as liquefied petroleum gas (LPG) plants, Mahmud added. Nazimuddin Chowdhury, secretary of the Energy and Mineral Resources Division who also spoke at the seminar, said the new refinery would have the capacity to process five million tonnes of crude oil annually. Interestingly, the BPC undertook projects to construct single point mooring system and double gas pipeline in Chittagong a few years ago, aiming to save foreign currency spent in fuel oil import. The projects have yet to be implemented. Furthermore, the government planned to build a second unit of Eastern Refinery Ltd, the sole oil refinery in the country at present, to stave off dependency on imported oil, but the expansion never took place. Eastern Refinery currently processes 1.3 million tonnes of crude oil per year, with the capacity to process 1.5 million tonnes. The second unit would have increased the capacity by three million tonnes, according to sources. Speaking to the Dhaka Tribune, an official of the Ministry of Energy, Power and Mineral Resources expressed concern about the practicality of establishing a new refinery unit. Requesting anonymity, the official said most of the projects that the BPC has undertaken in the last five years have either been scrapped or are stuck in red tape. “Taking up a brand new project will only add to the already complex situation.” The government also took initiative to build LPG plants in Mongla and Chittagong, but those initiatives were never implemented. As a result, Bangladesh could not reap the benefit of the drop in LPG price in the international market, which was nearly halved two years ago, sources said. Recently, Bangladesh signed a government-to-government memorandum of understanding with India in April to establish an LPG plant in the country. At the seminar, Nazimuddin said the government would ensure that no company could monopolise the LPG import in the country.