The decision to award the contract for the operation and maintenance (O&M) of Bangladesh’s first Single Point Mooring (SPM) with a double pipeline project to the China Petroleum Pipeline Engineering Co. Ltd (CPPEC) is set to be cancelled.
“The Energy and Mineral Resources Division has recently decided not to allow BPC to sign the contract with CPPEC. It has directed us to go for a fresh open international tender to select an O&M firm through a competitive bidding process,” said BPC’s Md Amin Ul Ahsan.
“The Energy and Mineral Resources Division will move the proposal again to the ACCEA to repeal its earlier decision… it may take 7-8 months to invite an international tender and complete the bidding process to appoint an O&M firm,” he told UNB.
Earlier, the Advisers Council Committee on Economic Affairs (ACCEA) had approved a proposal from the Bangladesh Petroleum Corporation (BPC), the implementing agency of the SPM project, to sign the O&M contract with the Chinese company during its meeting on November 21.
CPPEC had been working as the contractor for the SPM project, and BPC selected the firm for the O&M job without any competitive bidding process. The proposal was moved to ACCEA by the Energy and Mineral Resources Division under the Speedy Increase of Power and Energy Supply (Special Provision) Act 2010.
But a few days after the approval, the government repealed the Speedy Increase of Power and Energy Supply (Special Provision) Act 2010 on December 1, following an order from the High Court that removed the scope for signing the contract with the Chinese firm.
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The BPC chairman also informed that the SPM project’s implementation work will be completed by December 31 this year, and it will become operational only after the appointment of an O&M contractor.
The SPM, built on 90 acres of land in Maheshkhali Upazila, Cox's Bazar, is a government-to-government (G2G) initiative between Bangladesh and China, completed at a cost of Tk 8,341 crore.
Originally, the cost was much lower, but after escalating a number of times, finally this figure was settled, said the officials.
The state-owned BPC undertook the project to streamline the offloading of petroleum products and their transportation via pipeline.
The facility features a 36-inch-wide pipeline that transports crude oil from the mooring point to storage tanks at Kalamarchara in Matarbari. From there, the oil is moved 220 kilometers to the Eastern Refinery in Patenga, Chittagong, via an 18-inch-wide pipeline. The entire 110-km pipeline connects the deep-sea mooring point to the refinery.
According to officials, the SPM will significantly improve the efficiency of fuel offloading, reducing the time required to transfer imported petroleum from 11-12 days via lighterage ships to just 48 hours. This transition is expected to save approximately Tk 800 crore annually.
Officials also mentioned that there are three tanks with a storage capacity of 1.80 lakh kilolitres for crude oil and three tanks with a capacity of 1.08 lakh kilolitres for refined oil.
As part of the project work, approximately 135 kilometers (km) of offshore pipeline and 58 km of onshore pipeline have also been installed.
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In total, six storage tanks were built. Three of these tanks are designed to store crude oil, each with a 60,000 kilolitre capacity, while the remaining tanks are for storing diesel, each with a 36,000 kilolitre capacity.
The Netherlands-based Blue Water completed the construction of SPM 'Boya' at the project site.
Bangladesh annually imports around 6 million tonnes of crude and refined oil. Of this, 1.3 million tonnes are crude oil, with the remainder being refined petroleum products.
According to officials, a 36-inch-wide pipeline from the mooring point carries the crude oil to the tank at Kalamarchara in Matarbari. The oil is then transported to the Eastern Refinery in Patenga, Chittagong, 220 kilometres away, through an 18-inch-wide pipeline. The 110km pipeline connects the deep-sea mooring point to the Eastern Refinery Ltd in Patenga.