United News of Bangladesh

The Advisers Council Committee on Government Purchase (ACCGP) on Tuesday cancelled the tender for appointing an Operations and Maintenance (O&M) contractor for the Single Point Mooring (SPM) project. The committee approved the cancellation when Energy and Mineral Resources Division placed the proposal at the meeting chaired by Finance Adviser Dr Salehuddin Ahmed at the Secretariat. Earlier, on November 21, 2024, the government had approved in principle the appointment of China Petroleum Pipeline Engineering Company Ltd (CPPEC) as the O&M contractor on a government-to-government (G2G) basis. The approval was given in a meeting of the Advisers Council Committee on Economic Affairs (ACCEA) . The 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. Finance Adviser denies ‘special advantage’ in fertiliser imports 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 But a few days after the approval, the government repealed the Speedy Increase of Power and Energy Supply (Special Provision) Act 2010 on 1 December following an order from the High Court that removed the scope for signing the contract with the Chinese firm. 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 Tk8,341 crore. 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 kilometres 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.

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. Summit Group denies tax evasion allegations, calls reports "baseless" 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. Govt won’t raise power tariff despite pressure from IMF: Energy Adviser 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.

The Tk 8,300 crore Single Point Mooring (SPM) with double pipeline project is failing to utilise its full capacity due to non-expansion of the country's refinery capacity. According to official sources, the newly installed SPM can now hardly utilise 60 percent of its capacity while around 40 percent remains unutilised. The SPM project took about nine years to implement and now the project has been operational recently through execution of a test-run. But formally the project will be completed in June this year, said an official of the Bangladesh Petroleum Corporation (BPC). Officials informed that after recent commissioning of the SPM project, now it takes only 48 hours to transfer the imported petroleum from the mother vessel to storage tanks. Before setting up the SMP, it took 11 to 12 days to bring  the imported fuel to the oil tanker of Eastern Refinery Limited  at Petenga area through lighterage ships, which is very time-consuming, expensive, and risky. Currently, no lighterage is required to carry fuel from the mother vessel, which is now moored at the outer quay, after the implementation of the project, said the officials. 2 KNF operatives killed in army operation in Bandarban: ISPR The SPM was built on over 90 acres of land under a G2G project of Bangladesh and China at a cost of Tk 8341 crore at Maheshkhali Upazila in Cox's Bazar. Officials said that there are three tanks having a storage capacity of 1.80 lakh kilolitre crude oils and three tanks with 1.08 lakh kilolitre furnished oil. Project director of the SPM Sharif Hasanat admitted that the project's 30-40 percent capacity remained unutilised because of the limitations in refining more crude oils. He informed that Bangladesh annually imports about 4.5 million metric tons of refined oils and another 1.5 million metric tons of crude oil from abroad. "Through handling the imported oils, the SPM project now utilises 60 percent of its capacity," he said, adding, if more crude oils are imported SPM can be used for transportation purpose.       Officials said the government has undertaken a project to expand the capacity of the country's only refinery --the Eastern Refinery at Patenga with the title ERL-2 to increase the existing capacity by 3 million metric tons. But that project has not been implemented in the last 14 years since the project was conceived by the Bangladesh Petroleum Corporation (BPC).     According to official sources, BPC was considering a technical offer of Technip, a French engineering company, which was engaged through an unsolicited process for creating Front End Engineering Design (FEED) involving Tk 371.81 crore for the proposed ERL unit-2 through a contract signed in January, 2017. But Technip has left and a local company is trying to persuade the government to implement the ERL-2 project through public-private partnership (PPP) although that private company has no experience in implementing such a project, said a top official of the BPC. Teen gang leader killed in Chattogram over ‘establishing dominance’ The Unit-2 project was taken by BPC in 2010 to enhance the company’s capacity to 4.5 million metric tons by adding 3 million metric tons from the new one. The Unit-1 of the ERL, was installed in 1968 by the same French company, has an annual production capacity of 1.5 million metric tons. Recently, an Indian firm claimed that it will be involved in the project to implement it at a cost of US 1.7 billion dollars over a period of next three years. Officials said when BPC conceived the idea of ERL Unit-2 in 2010, the project cost was estimated at Tk 13,000 crore. Then, the project’s cost was raised to Tk16,739 crore in a revised proposal. But now, the cost may cross Tk 18,000 crore, he said adding that BPC has sent a new development project proforma (DPP) to the Planning Commission through the Energy and Mineral Resources Division (EMRD) seeking another revision to the cost. The country consumes about 6-6.5 million metric tons (MTS) of petroleum of which 4.8-5 million MTS is imported as refined one while the remaining 1.2-15 million MTS as crude oil to refine those at ERL. Read more: Bangladesh to import 1.5mn metric tons of crude oil from Saudi Aramco, UAE’s Adnoc

Implementation of  Single Point Mooring (SPM) project in Chattagram will face further delay due to absence of Chinese workers who got stuck in their own country following coronavirus outbreak.