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Construction of new oil refinery starts this year

  • Published at 10:33 am July 13th, 2017
  • Last updated at 01:13 pm July 13th, 2017
Construction of new oil refinery starts this year
State-owned Bangladesh Petroleum Corporation (BPC) will start earth filling from November this year for the second crude oil refinery unit near Payra Seaport in Patuakhali. The new refinery would have the capacity to process five million tonnes of crude oil annually. The decision was taken at a meeting of Energy and Mineral Resources Division on July 5. The meeting also decided to appoint a project management consultant as early as possible to supervise the project. Besides, a feasibility study and front end engineering design will also complete soon for establishing the refinery unit with a Single Point Mooring (SPM). An SPM facilitates the transfer of crude oil from mother vessels to offshore tanks and then to onshore tanks. The SPM's main objective is to ensure the unloading of imported crude oil in a more efficient and time-saving manner. On December 8, Bangladesh signed a Tk5,426.26cr deal with Chinese state-owned oil pipeline builder China Petroleum Pipeline Bureau to install a SPM at Sonadia Island in the Bay of Bengal and two 220km-long pipelines to connect the SPM with Eastern Refineries Ltd (ERL) in Chittagong. After stalling the expansion of the existing crude oil refinery in the country for years, the BPC has 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. The BPC also plans to build a single point mooring system and a refinery unit in Chittagong. BPC undertook projects to construct single point mooring system and double fuel oil pipeline in Chittagong few years ago, aiming to save foreign currency spent in fuel oil import. The projects are yet to be implemented. Beside, 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. Currently BPC imports crude and refined petroleum from different Middle Eastern and other countries through Chittagong Port. Large oil tankers unload the crude oil to lighter vessels at sea, which carry it to Eastern Refineries for distillation.