The government has decided to set up the second unit of the Eastern Refinery Limited (ERL) with a capacity of refining around 3.5m tonnes of crude oil annually.
The unit will be completed by June 2016 under the Speedy Supply of Power and Energy (special provision) Act.
“We have received permission from the Prime Minister Sheikh Hasina [also the minister in-charge of the Power Ministry] to install the second unit of Eastern Refinery under the special act,” Md Mozammel Haque Khan, secretary of Energy and Mineral Resources Division, told the Dhaka Tribune.
“We have already formed a Project Processing Committee (PPC) consisting of seven members including Finance Ministry and Law Ministry officials to negotiate with different foreign companies to implement the unit,” said Mozammel, also the head of the PPC.
He added that the PPC would invite foreign companies to implement the project, while the committee would also consider if any foreign company submitted proposal showing interest to work in the project.
“We want to build the unit quickly. It is necessary to establish the unit to ensure energy security of the country,” Mozammel said.
Meanwhile, Chinese state-owned China National Petroleum Corporation (CNPC) has already shown their interest to install the unit. The ERL, under Bangladesh Petroleum Corporation (BPC), will implement the project.
Earlier, the BPC negotiated with Chinese state-owned firm Wuhun Engineering Company Ltd to implement the project, but were unable to reach a conclusion in this regard.
Eastern Refinery – the country’s lone refiner in Chittagong – currently refines 1.3m tonnes of crude oil per year while the capacity is 1.5m tonnes, meeting only 10% of the country’s demand.
“The BPC saves Tk6-7 per litre by refining crude oil instead of importing refined oil,” BPC chairman Md Eunusur Rahaman told the Dhaka Tribune.
He said the capacity of the proposed unit would be three times more than the existing one, adding that a 30-acre land near the Eastern Refinery has already been acquired for expansion of the refinery. The construction cost has been estimated at Tk76.2bn.
The BPC annually imports about 5m tonnes of crude and refined oil at an average price of Tk500bn, according to official data.
Under the special act, the government has so far signed agreements on setting up the country’s first floating storage and re-gasification unit (FSRU), to drill 10 wells of six gas fields and to build several power plants.
