CHATTOGRAM, Mar 14: As S Alam Group's partnership with the Eastern Refinery Limited (ERL) has been cancelled, the second unit of the ERL will now be built under the Bangladesh Petroleum Corporation (BPC) with state funds along with a foreign financer.
Meanwhile, the Ministry of Energy and Mineral Resources has written to the BPC to complete a fresh development project proposal as soon as possible as it has been trying to build the facility with Kuwait funds.
To this end, the ministry has started negotiations with the Kuwait government for bankrolling the project. The financer is expected to finalise it very soon.
Talking to the FE, ERL managing director Sharif Hasant said, "Work on the project will begin only after required funds are secured. The interim government is considering it as a fast-track project."
Earlier, the government of Bangladesh allocated 70 per cent of the funds required as loan, while the remainder will be allocated by the BPC.
Sources said the second unit will be set up using state-of-the-art technology to refine various types of crude oil, including Russian crude oil.
The country's lone state refiner does not have the capacity to refine Russian crude.
Once the second unit project is done, Bangladesh will be able to import and refine an extra 3.0-million tonnes of eco-friendly Euro 5 fuel oil a year, saving $9.0-10 per barrel in refined fuel given current international market prices.
The feasibility study report on the second ERL unit showed annual savings of $237 million with an estimated $11 in savings per barrel.
It will also be able to meet 100 per cent of the current demand for jet fuel and gasoline. Fuel oil can be exported after meeting local demand.
ERL officials said the production of two new petroleum products, including lube-based oil and sulfur, would be possible at the second unit.
The then government rubber-stamped the project in 2014 under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010.
In 2013, the cost of the project was estimated at Tk 130 billion.
Later, the project cost was revised at Tk 197 billion and then further increased to Tk 237 billion.
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