IDB to finance study on Eastern Refinery capacity expansion
Monday, 27 August 2007
FE Report
The Islamic Development Bank (IDB) will provide a grant amount of $218,000 to finance a feasibility study on capacity expansion of the state-owned Eastern Refinery Limited (ERL).
"The Energy and Mineral Resources Division (EMRD) Sunday endorsed the IDB proposal for conducting the feasibility study," said a senior EMRD official.
He said, if found viable, the IDB will provide nearly US$ 200 million to increase the refining capacity of the ERL about three-fold through balancing, modernisation, rehabilitation and expansion (BMR&E).
The EMRD, however, conducted a pre-feasibility study several months ago where the proposed BMR&E of the ERL was found to be viable.
Currently, the ERL has the refining capacity of 1.30 million tonnes per year, which could be augmented to 3.0 million tonnes a year after the proposed BMR&E is carried out.
The ERL also refines condensates collected at the gas fields, to petrol and diesel.
The country's total condensate production now stands at 5,000 barrels per day.
Once implemented, the cash-starved Bangladesh Petroleum Corporation (BPC) will be able to trim its fuel import cost by at least 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 oil and the remaining 2.5 million tonnes are 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 enhance the refining capacity of the ERL against the backdrop of the volatile international oil market.
The Islamic Development Bank (IDB) will provide a grant amount of $218,000 to finance a feasibility study on capacity expansion of the state-owned Eastern Refinery Limited (ERL).
"The Energy and Mineral Resources Division (EMRD) Sunday endorsed the IDB proposal for conducting the feasibility study," said a senior EMRD official.
He said, if found viable, the IDB will provide nearly US$ 200 million to increase the refining capacity of the ERL about three-fold through balancing, modernisation, rehabilitation and expansion (BMR&E).
The EMRD, however, conducted a pre-feasibility study several months ago where the proposed BMR&E of the ERL was found to be viable.
Currently, the ERL has the refining capacity of 1.30 million tonnes per year, which could be augmented to 3.0 million tonnes a year after the proposed BMR&E is carried out.
The ERL also refines condensates collected at the gas fields, to petrol and diesel.
The country's total condensate production now stands at 5,000 barrels per day.
Once implemented, the cash-starved Bangladesh Petroleum Corporation (BPC) will be able to trim its fuel import cost by at least 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 oil and the remaining 2.5 million tonnes are 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 enhance the refining capacity of the ERL against the backdrop of the volatile international oil market.