IDB agrees to give $200m for ERL's capacity expansion
Tuesday, 12 June 2007
M Azizur Rahman
The Islamic Development Bank (IDB) has agreed to provide nearly US$ 200 million for capacity expansion of the state-owned Eastern Refinery Limited (ERL).
Sources said the Jeddah-based multilateral donor agency has recently completed a preliminary feasibility study on the proposed project for tripling the crude oil refining capacity of the ERL through a balancing, modernisation, rehabilitation and expansion (BMR&E) programme.
Currently, the ERL has the capacity to refine 1.30 million tonnes crude oil per year, which could be augmented to 3.0 million tonnes a year following BMR&E of the plant, a senior Energy and Mineral Resources Division (EMRD) official told the FE.
He said a high-powered IDB team visited the country several months ago and held discussions with key officials of the EMRD including the ERL to proceed with the project proposal.
Once implemented, the cash-starved Bangladesh Petroleum Corporation (BPC) will be able to trim its fuel import cost by nearly Tk 300 million a year, the EMRD official said.
The BPC currently imports 3.78 million tonnes of petroleum products every year, of which 1.3 million tonnes are crude and the remaining 2.5 million tonnes refined oil products.
The price difference between refined oil and crude oil usually ranges between $8.0 and $10 a barrel, the EMRD sources said.
EMRD sources said the government had been seeking assistance from multilateral donors for long to augment the refining capacity of the ERL against the backdrop of the volatile international oil market.
As part of its continued support in footing overheated fuel import costs the IDB has come up to provide assistance for the ERL expansion.
The IDB has been providing syndicated loans to the BPC for the last several years to meet the latter's fuel import costs.
It has provided over $800 million to the government to facilitate the state-owned BPC in importing fuel oil.
International banks and financial institutions including those of European Union (EU), and the Middle East countries joined with the loan syndication, arranged by the IDB.
The Islamic Development Bank (IDB) has agreed to provide nearly US$ 200 million for capacity expansion of the state-owned Eastern Refinery Limited (ERL).
Sources said the Jeddah-based multilateral donor agency has recently completed a preliminary feasibility study on the proposed project for tripling the crude oil refining capacity of the ERL through a balancing, modernisation, rehabilitation and expansion (BMR&E) programme.
Currently, the ERL has the capacity to refine 1.30 million tonnes crude oil per year, which could be augmented to 3.0 million tonnes a year following BMR&E of the plant, a senior Energy and Mineral Resources Division (EMRD) official told the FE.
He said a high-powered IDB team visited the country several months ago and held discussions with key officials of the EMRD including the ERL to proceed with the project proposal.
Once implemented, the cash-starved Bangladesh Petroleum Corporation (BPC) will be able to trim its fuel import cost by nearly Tk 300 million a year, the EMRD official said.
The BPC currently imports 3.78 million tonnes of petroleum products every year, of which 1.3 million tonnes are crude and the remaining 2.5 million tonnes refined oil products.
The price difference between refined oil and crude oil usually ranges between $8.0 and $10 a barrel, the EMRD sources said.
EMRD sources said the government had been seeking assistance from multilateral donors for long to augment the refining capacity of the ERL against the backdrop of the volatile international oil market.
As part of its continued support in footing overheated fuel import costs the IDB has come up to provide assistance for the ERL expansion.
The IDB has been providing syndicated loans to the BPC for the last several years to meet the latter's fuel import costs.
It has provided over $800 million to the government to facilitate the state-owned BPC in importing fuel oil.
International banks and financial institutions including those of European Union (EU), and the Middle East countries joined with the loan syndication, arranged by the IDB.