ERL to sign capacity enhancement feasibility study deal with Pak co

FE Team | Published: September 28, 2008 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The government is set to sign a deal with a Pakistan state-owned company to conduct feasibility study for a proposed US$280 million project to triple capacity for the Eastern Refinery Limited (ERL), an official said Saturday.
The Chittagong-based lone state-owned refinery can refine only 1.5 million tonnes of crude oil per annum, meeting only 35-40 per cent of the country's total refining need.
The government took the massive project to triple ERL's capacity in the wake of steady rise in oil consumption. The country consumes 3.7 million tonnes of crude a year but experts said the figure is likely to shoot past five million in the next three years.
ERL managing director Rejaul Alam said his company has now finalised an agreement with a Pakistani state-owned consultancy firm, PITAC, to conduct studies on how the capacity enhancement project would be carried out.
"We hope we will sign the feasibility study deal with a Pakistani company by October 8," he said.
The PITAC, a wing of Pakistani industry ministry, has won the bidding for the ERL feasibility project by quoting the lowest price.
It will advise on new infrastructure, the viability of the capacity enhancement project and whether or not the project needs more funding, officials said.
The Jeddah-based Islamic Development Bank will finance nearly 70 per cent of the project through grant while the remaining amount will be funded by the Bangladesh government
The Pakistan firm will carry out the study at a cost of US$ 188000. It will have to submit its report within six months after commencing study.
ERL officials said they would start balancing, modernization, rehabilitation and expansion (BMRE) of the four-decade old refinery after completion of the feasibility study.
"The BMRE will continue until 2012. After the completion of the project, we hope to refine 4.5 million tonnes of crude per annum from 2013," the ERL managing director said, adding it would also create jobs for 200 people.
The capacity building work will be done through constructing a fresh crude oil jetty at the mouth of river Karanphuli, additional storage capacity, and ancillary utilities.
Officials said the refinery could meet most of the local refining demand after completion of the BMRE. It could also triple its naptha oil export to 300,000 tonnes annually.
Eastern Refinery Limited was built at Patenga in Chittagong in 1968.