The BPC signed a contract with Chinese firm China Petroleum Pipeline Bureau (CPP) on December 7, 2016 last to implement the ‘SPM with Double Pipeline’ project by December 2019 at a cost of $550.40 million.
The government undertook the project with a special emphasis to reduce both the time and cost to directly receive crude petroleum from deep sea vessels at the country’s only refinery in the public sector.
At present, large vessels carrying crude oil are anchored in the deep sea and state-owned BPC uses some lighterage vessels to transport imported raw petroleum to state-owned Eastern Refinery Limited (ERL) in Chattogram.
Under the SPM project, a total of 220-km pipeline will be installed in the Bay of Bengal to transport imported crude and refined oil.
As per the deal, Chinese state-run CPP is supposed to implement the project as EPC (engineering, procurement and construction) in the next 36 months from the signing of the agreement.
Although 19 months have elapsed since the signing of the deal, only necessary survey works were carried out and now the design work is underway to start the physical construction work.
“The survey has been completed and now work on design is going on. We hope the physical work will start soon on completion of the design work,” Mozammel Haque, BPC director (Planning and Development), told UNB.
BPC officials said the survey work required enough time as those included various activities like feasibility study as well.
Explaining the necessity of the project, State Minister for Power and Energy Nasrul Hamid said it will help save Tk 1,000 crore a year as there will be no need to use lighterage vessels to transport the raw petroleum.
He said the SPM could be effectively used by the private sector importers as well.
BPC officials said the total cost of the project was estimated at Tk 5426.26 crore where the Chinese Exim Bank will finance Tk 4293.12 crore and the Bangladesh government will provide Tk 1021.19 crore and the remaining Tk 111.95 will be invested by BPC from its own fund.
ERL currently refines 1.5 million tonnes of crude petroleum annually. On completion of the unit -2, its capacity will increase to 4.5 million tonnes.
The SPM will have an annual unloading capacity of 9 million. It will be able to unload 120,000 tonnes of crude oil in 48 hours and 70,000 tonnes of diesel in 28 hours.
BPC officials said the main objectives of the SPM project include simplifying and accelerating the unloading process of imported crude oil and finished products, lessening time for crude oil and high speed diesel (HSD) unloading and lowering the unloading cost of imported crude oil and finished products by eliminating lightering process.
Increasing the capacity to process crude oil to meet increased demand of the country, construction of a tank farm at Maheshkhali in Cox’s Bazar as an emergency oil storage backup and increasing finished product storage facilities to ensure energy security of the country are also among the main purposes of the SPM project, they said.
Officials said the SPM project will have supervisory control and data acquisition (SCADA) & Communication System and also includes construction of three crude oil tanks (each of net capacity 50,000 m³), three HSD tanks (each of net capacity 30,000 m³), main pumps, booster pumps and other pumps, installation of generator for power supply, housing facilities, administration and other buildings, pigging system, custody metering system, security system and firefighting system.