Army, navy to build two oil pipelines

The government is set to award contracts for building two major onshore oil pipelines to army and navy for smooth and cost-effective implementation of the projects, said officials.
An aggregate cost of Tk 27 billion has been estimated for the two pipeline projects.
Bangladesh Navy will build a 17-kilometre A-1 jet fuel-carrying pipeline from Pitloganj in Narayanganj to Kurmitola aviation depot of Hazrat Shahjalal International Airport (HSIA).
And Bangladesh Army is going to be assigned to the task of building a 237-km-long pipeline to carry diesel from the port city of Chittagong to the capital, Dhaka.
The cabinet committee on government purchase has already approved issuance of notification of award (NOA) to the navy for setting up the jet-fuel carrying pipeline.
The defence service will build the pipeline as an engineering, procurement and construction (EPC) contractor, said a senior official of Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR).
A final deal between the state-run Bangladesh Petroleum Corporation (BPC), the implementing authority of the pipeline project, and Bangladesh Navy will be inked soon to start the project work, he added.
For building the 237-km Dhaka-Chittagong pipeline, the BPC is in final round of negotiations with the Bangladesh Army, he added.
Currently, Bangladesh depends on coastal tankers, railway wagons and tank-lorries to carry both crude and refined oils to end-users after import from global suppliers into Chittagong depots as it has no major oil- carrying pipeline.
Small barges, mostly owned by the private sector, also carry petroleum products on various river routes.
It costs BPC around Tk 1.4 billion ($17.8 million) annually to transport fuels around the country, sources said.
"But this (cost) could be cut once the pipeline is built," the BPC official said.
Once laid down, these pipelines would help check delay in oil delivery to end-users, traffic congestion, accidents during transportation and other unforeseen bottlenecks like natural disaster and strike, industry owners said.
Officials said initially, the BPC had planned to select contractors to build both the pipelines through competitive bidding on a build, own, operate and transfer (BOOT) basis.
It subsequently had invited international tenders seeking expressions of interest to construct both the pipelines on BOOT basis.
But, afterwards, the BPC backed down and decided to give the tasks to army and navy by weighing different factors, like cost and security, said the official.
"The BPC is expected to get construction of both the pipelines completed within next three years to 2020," he added.
The A-1 jet fuel will be transported by dedicated coastal tankers from main storage infrastructure in Chittagong to the proposed pumping facilities at Pitolgonj, said the BPC official.
The fuel will be unloaded into the storage tank of Pitolgong pumping facilities from where it will be carried to the HSIA and be refueled to national and international aircraft.
The BPC has decided to engage Bangladesh Army to build the Tk 25- billion 237-km Dhaka-Chittagong pipeline mostly to carry around 3.0 million tonnes of diesel per annum.
The pipeline will carry diesel from BPC's oil terminal in Chittagong to the Godnail tank terminal in Narayanganj to cut cost and time in fuel transportation.
BPC currently imports around 3.5 million tonnes of diesel per year from around a dozen oil suppliers mostly of the Middle East and Asian origin.
A-1 jet fuel demand in Bangladesh is around 300,000 tonnes per year.
The BPC usually gets diesel and A-1 jet fuel through import from international suppliers and as an output from its wholly owned subsidiary, Eastern Refinery Ltd, or ERL, which is the country's sole refinery.
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