Donors' aid sought to triple capacity of ERL

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M Azizur Rahman
The government has sought donors' assistance worth US$ 1.0 billion to triple the country's crude oil refining capacity by balancing, modernisation, rehabilitation and expansion (BMRE) of the state-owned Eastern Refinery Limited (ERL).
"We have sought donors' assistance through the Economic Relations Division (ERD) of the Finance Ministry," Bangladesh Petroleum Corporation (BPC) chairman Anwarul Karim told the FE.
He said a number of donor agencies including the Islamic Development Bank (IDB), are considering actively to fund the ERL's capacity expansion project.
The IDB in 2007 provided funds to conduct a feasibility study and on completion of the study the proposed ERL's capacity expansion project was found economically viable.
A number of multilateral donor agencies including the World Bank and Asian Development Bank have been targeted by the governments for mobilising funds, a senior energy ministry official said.
He said the BMRE of the ERL would ensure the country's future energy security and help reduce overall oil import costs.
It would also help meeting the soaring petroleum demands when some 18 diesel and furnace oil run power plants will be operational by early 2011.
BPC expects a 33 per cent growth in annual demands to 4.85 million tonnes when all the new plants will start generating electricity.
Petroleum demand would start soaring from March 2010 when four new diesel-run power plants having the generation capacity of 250 megawatts (mw) would be operational.
Consumption would rise further with the installation of four new furnace oil-fired power plants to generate 280 mw of electricity from August 2010.
Demands would peak when ten furnace-oil run power plants would come online to generate 830 mew of electricity by early 2011, BPC officials said.
Currently the crude oil refining capacity of the ERL, the subsidiary of the state-owned BPC, is around 1.30 million tonnes per year.
It could be augmented up to 3.0 million tonnes a year after the BMRE, said the energy ministry official.
Country's total consumption of petroleum products is around 3.7 million tonnes a year of which about 35 per cent requirement is currently met by ERL's production.
The remaining 65 per cent fuel is met by imports as refined product.
The price differences between refined and crude oil ranges between $8.0 and $10 per barrel, said sources.
When contacted the IDB representative in Bangladesh Farook uz Zaman said the Jeddah-based donor agency would consider funding the ERL's BMRE after financing the single buoy mooring project to carry fuel from deep sea to the shore.
"The IDB is set to approve funds worth $130 million in December 12 next to build an undersea pipeline to carry petroleum from vessels moored at the outer anchorage to depots onshore," Mr Zaman told the FE.
Currently the IDB provides fund around $1.0 billion to import petroleum products for domestic needs.