Kuwait to get Maheshkhali land for oil refinery

The government has decided to offer around 1,000 acres of land on Maheshkhali Island in the Bay of Bengal to Kuwait Petroleum International (KPI) to construct a crude oil refinery with 10 million tonnes per year capacity at a cost of US$ 6.0 billion, said officials.
The land area on the south-eastern island has already been earmarked for building the refinery by the KPI, a subsidiary of the state-run Kuwait Petroleum Corporation (KPC), BPC chairman AM Badrudduja told the FE Thursday.
The government would hand over the land to the Middle Eastern firm once all relevant formalities over the project are completed, he said.
This land has been identified for offering to the KPI following a request from the firm in October, 2014.
The KPI had requested the government of Bangladesh to provide all necessary infrastructures like land, electricity, fresh water, and roads and communication, to the project site. It also wanted tax holiday for the project and 100 per cent profit repatriation.
Officials said the KPI is interested to build the crude oil refinery after carrying out a feasibility study over the project.
It has already stated that a refinery with 300,000 barrels per day capacity would be a standard one. But its capacity should not be less than 200,000 barrels per day for economic viability, said a BPC official.
It might require a minimum investment of over $6.0 billion to build a 200,000 -barrel per day refinery.
KPI said that the refinery must have options for future expansion to cater to the growing petroleum demand in the country as well as in the region.
The Kuwaiti firm eyed building a complex refinery to convert less valuable petroleum output into a valuable one, the official said.
The refinery project was planned for either a joint venture with BPC or KPI alone could build it with its international partners.
The progress of the planned refinery project is now on hold as the KPI is currently reviewing its Asian region's strategic plan afresh, industry insiders said.
It would be geared up again on completion of the review, according to a senior BPC official.
Currently, Eastern Refinery Ltd (ERL), the country's lone refinery and a wholly-owned subsidiary of the BPC, has a plant with 1.5 million- tonne per year capacity, which can refine 1.4 million tonnes crude per year at its de-rated capacity.
BPC wrote letters to both KPC and KPI in March 2012, inviting them to set up an oil refinery plant in Bangladesh.
Bangladesh currently imports around 6.0 million tonnes of refined and crude oil every year, BPC statistics reveals.
BPC imports 1.4 million tonnes of crude in total from Saudi Aramco and Abu Dhabi National Oil Company (ADNOC).
Saudi Aramco and ADNOC are supplying 700,000 mt of crude each.
BPC imports refined petroleum products from KPC; Petco, the trading arm of Malaysia's Petronas; Emirates National Oil Company, or ENOC; PetroChina; Vietnam's Petrolimex; Middle East Oil Refinery, or MIDOR of Egypt, Philippines National Oil Company, or PNOC;  Bumi Siak Pusako of Indonesia; and Unipec Singapore under term deals.
Bangladesh's oil imports have been increasing steadily over the past several years as domestic demand rises, especially for oil-fired power plants.
    mazizur.rahman@outlook.com