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

Bangladesh will import 1.5 million (15 lakh) metric ton of crude oil from Saudi Arabia and United Arab Emirates (UAE) for the year 2024. The Cabinet Committee on Economic Affairs (CCEA) in a virtual meeting, with Finance Minister AHM Mostafa Kamal, in-principle approved a proposal in this regard. As per proposal of the state-owned Bangladesh Petroleum Corporation (BPC), moved by the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources, the crude oil will be imported through direct purchase method (DPM) which means there was no tender or competitive bidding process in selecting the supplier. Dhaka urges Riyadh to consider crude or refined oil on deferred payment basis The proposal mentioned that Saudi Aramco and UAE-based Adnoc will supply the total crude petroleum. While briefing reporters about the outcomes of the Cabinet body's meeting, additional secretary of the Cabinet Division Sayeed Mahbub Khan informed that the cost or price of petroleum was not mentioned in the proposal as it came for in-principal approval. Bangladesh needs to import about 6.5 million metric ton of petroleum oil annually. Of this, about 1.5 million is crude and the remaining amount is refined petroleum. Glitch in brand new pipeline halts transfer of crude oil from mother vessel in Maheshkhali    The Cabinet body approved, in-principle, another proposal -- of Bangladesh Hi-Tech Park Authority under the Department of Information and Communication Technology -- to appoint a private company for operation and maintenance work of its “Vision 2041 Smart Tower” in Kawranbazar, Dhaka. The company will operate the building under the "Digital Entrepreneurship and Innovation Eco-System" project after its construction work.

Bangladesh will import 2.040 million (20.40 lakh) metric tons (MT) of refined petroleum from 7 state-owned entities from 6 countries for a six month period from January to June in 2023. Cabinet Committee on Government Purchase (CCGP) in a virtual meeting approved a proposal of state-owned Bangladesh Petroleum Corporation (BPC) in this regard on Wednesday. The 7 state-owned entities are BSP Indonesia, ENOC UAE, IOCL India, Petrochina China, PTLCL Malaysia, PTTT Thailand and UNIPEC China. As per the proposal, placed by the Energy and Mineral Resources Division, the BPC will import the bulk refined petroleum at a total cost of Tk 18,215.52 crore. Read more: Bangladesh wants to import petroleum from KSA at lower price: Nasrul Finance Minister AHM Mustafa Kamal presided over the meeting which was virtually attended by the members of the committee. However, no detail of the proposed refined petroleum import was disclosed by the authorities concerned. Normally, Bangladesh annually needs to import about 6.633 million metric tons of refined and crude petroleum of which 5.233 is refined and remaining 1.4 million metric tons is crude oils for a year to meet its requirements. The cabinet body also approved another proposal of the BPC to import 60,000 metric tons of diesel from India's Numaligarh Refinery Limited (NRL) from January to December, 2023 period at a cost of Tk 545.04 crore. The committee also approved three contract award proposals of the Bangladesh Rural Electrification Board (BREB) for modernisation and capacity building of power distribution projects in Khulna Division. All the three contracts were awarded to the BRB Cable Industries Ltd. The 2 contracts are supplying 6,650 km conductor and wire (Bare) supply at Tk 67.03 crore under Lot -1 and the supply of the same products at price under Lot-2. Read more: Bangladesh plans to import 5.46 million MT of petroleum in 2023 Under the Lot-3, there will be supply of 1,200 km of conductor and wire (Insulated) at 18.67 crore A proposal of the Bangladesh Chemical Industries (BCIC) received the nod of the committee to import 30,000 metric tons bulk granular urea fertilizer from Fertiglobe Distribution Limited, UAE at Tk 150.08 crore. Another proposal of Trading Corporation of Bangladesh (TCB) under the Ministry of Commerce to import 12,000 MT of sugar from Srinnova Ispat Private Ltd., Kolkata, India at a cost of Tk 70.02 crore received the nod of the committee.

A fire broke out on the premises of the Eastern Refinery at Patenga in Chattogram on Saturday, but the main refinery was not impacted, officials said. Abdul Hamid, deputy assistant director of the Fire Service and Civil Defence in Chattogram, told UNB that no major damage was reported, and the fire came under control before it could spread at the country’s lone state-owned refinery. He said several units of the fire department responded quickly after the fire broke out near the metering area of the refinery around 10:30 am. Read Fire breaks out at Old Dhaka plastic factory He said several units of the fire department responded quickly after the fire broke out near the metering area of the refinery around 10:30 am. He said the blaze came under control. The cause of the fire could not be determined immediately, he said. In Dhaka, an official at the Bangladesh Petroleum Corporation (BPC) told UNB that the main refinery was safe from the fire, and personnel from the Bangladesh Navy and the Air Force joined the firefighters to douse the fire. The refinery is a subsidiary of the BPC.   “The drainage system has been impacted, not the main refinery,” the BPC official said on condition of anonymity. Read Depot Fire: UN for joint efforts in addressing “safety deficits” in safety deficits in workplaces

Bangladesh Petroleum Corporation (BPC) is now incurring a loss of Tk 63 crore per day as the state-run company sells its imported products at rates lower than import cost. According to fuel marketing agency, it has to incur a loss of Tk 37 per litre in the sale of diesel, Tk 10 in octane, Tk 15 in furnace oil and Tk 7 in jet-fuel. “We’ve really been facing a tough situation. Everyday we’re communicating the situation to the Energy and Mineral Resources Division”, ABM Azad, chairman of the BPC told UNB. He, however, declined to give any indication on any possible increase of the petroleum price in the country to offset the loss. He said BPC has been considering different options and sending those to the top policy making level. Also read: BPDB’s extra purchase order of petroleum puts BPC in trouble “The government is the ultimate authority to make the final decision on any issue in regard to the petroleum fuel”, said the BPC chairman. Responding to a question on any cut in taxes on the import of petroleum, Azad said, he did not make any such suggestion as it is beyond his capacity. But he noted that in last two fiscal years, the BPC had to pay Tk 19,000 crore in VAT and taxes.    The BPC chairman’s remarks came amid the growing petroleum price hike on the international market due to the war between Russia and Ukraine. The crude oil price already crossed $113 per barrel on Thursday which was below $100 before the start of the war.

Bangladesh has planned to import 6.4 million metric tons (MT) of fuel oils for the calendar year 2022 amid the overheated international market. The global oil market remained volatile as petroleum prices have gone up to a highest $83 per barrel for crude oil and $93 for refined fuel from below $30 for crude and $40 for refine. In terms of quantity, this is one (1) million MT up from the current year’s total import as the country imported 4.544 million MT in 2021 to meet its requirements up to December this year. Read: BPDB’s extra purchase order of petroleum puts BPC in troubleThe figure came from the annual import plan of Bangladesh Petroleum Corporation (BPC) which was already approved by the Cabinet Committee on Economic Affairs, the highest policy approval body. In the proposal, the BPC made the petroleum forecast mentioning that the Covid-19 situation has improved with vaccination of 10 percent of the population and the regaining of the country’s economic activities resulting in an increased price of petroleum fuels. However, the country’s principal petroleum marketing body did not give any indication of financial involvement to execute its fuel import plan.“We’ve just received a nod from the government’s highest policy level. But no cost has so far been calculated,” said Syed Mehedi Hasan, director (operations and planning).“Hope, we can make an estimate about the possible cost by next month,” he told UNB. BPC documents also show that it has taken approval for the import of another 670,000 MT of refined fuel to “deal with any emergency situation” caused by the rise in fuel demand.Though the BPC did not calculate the possible cost, the economists and energy experts are worried about the escalation in the cost in petroleum import.They said it is obvious the country’s petroleum import bill will go up enormously in 2022 for two reasons -- one for higher quantity of imports and another for higher price in petroleum on the global market, said Dr Khondaker Golam Moazzem, Centre for Policy Dialogue (CPD) director (research). Considering the upward trend in price and demand, he calculated that the country may have to spend $3.94 billion (equivalent to Tk 33,056.6 crore) in 2022 to import the proposed 6.4 million MT of petroleum. The calculation was made including the existing 34 percent taxes in the cost. He said this means the country will need to pay an extra $516 million in 2022 over its spending of $3.424 billion in 2021. Read: CPD for reinstating previous fuel prices If 34 percent overall taxes are waived, the cost will come down to $2.94 billion, said Dr Golam Moazzem, who believes the government should cut the taxes on import of petroleum to give a relief from the burden of high cost of fuel for the sake of economic recovery from the shock of the Covid-19.

 

Finally, Bangladesh Petroleum Corporation (BPC) has moved to appoint a consultant for its proposed LPG terminal project at under-construction Matarbari Deep Sea Port.

A lack of requisite manpower is likely to hamper the scope of Bangladesh Petroleum Corporation's operations, that have grown exponentially without a corresponding expansion in the government-mandated workforce for over four decades.

The Cabinet Committee on Public Purchase on Wednesday approved eight proposals, including the import of 1.3 million metric tons of crude oil and 105,000 metric tons of fertilizer from foreign sources.