Kuwait willing to build large refinery in BD

Kuwait Petroleum International (KPI), the International investment arm of Kuwait Petroleum Corporation (KPC), has shown interest to build a 10 million- tonne per year capacity crude oil refinery worth US$6.0 billion in the country, a top official said Thursday.
A high- powered KPI delegation led by its president and chief executive officer (CEO) Bakheet Al Rashidi visited the country last week and held discussions with top officials of Bangladesh Petroleum Corporation (BPC), Board of Investment (BoI), BPC Chairman Md Eunusur Rahman told the FE.
"KPI informed us that a 0.3m barrels per day crude oil refinery would be of a standard capacity refinery it wants to build and it should not be less than 0.2m barrels per day capacity for its economic viability," he said.
Under current global context it requires investment of at least $6.0 billion to build one 0.2m barrels per day refinery, equivalent to 10 million tonnes per day capacity, an industry insider said.
The KPI team visited the country to provide detailed requirements for building the planned crude oil refinery, said a BPC official.
KPI wants that the government of Bangladesh would provide all necessary infrastructures like land and its development, electricity supply, supply of fresh water, roads and communication to the project site.
It also wants tax holiday for the project and 100 per cent profit repatriation benefit for the project as well as of its foreign employees.
"We have informed KPI about the benefits of foreign direct investment in Bangladesh, which include tax holiday for a certain period, 100 per cent profit repatriation etc," BPC chairman said.
The Kuwaiti firm is eyeing to build a complex refinery having arrangements to convert less valuable petroleum output to valuable ones, he added.
KPI also wants that the refinery must have options for future expansions to cater to the needs of growing petroleum demand in the country as well as the region, said Mr Rahman.
The refinery project might be of a joint venture with BPC or KPI alone could build it with its international partners, said the BPC top brass, adding, the modality of the project would be decided later.
"We shall send the outcome of the discussion with the KPI to the Energy and Mineral Resources Division of the ministry of Power, Energy and Mineral Resources (MPEMR) for future action," he said.
Everything depends on the decision of the government, he added.
"We shall inform KPI the government's feedback on its investment proposal after getting feedback from the government," he added.
Before last week's meeting KPI had carried out a feasibility study internally over its planned refinery installation.
It went through Bangladesh's oil import trend, demand- supply status, source of imports etc as part of its study, said sources.
It also studied through the South Asian regions' oil import and consumption pattern to see whether the planned refinery could serve the regional demand, he said.
If established, the KPI's refinery would be Bangladesh's second refinery.
Currently the country's lone refinery, Eastern Refinery Ltd, a wholly owned subsidiary of BPC, has a 1.5 million tonne per year crude oil refining capacity plant, which actually can refine 1.4 million tonnes at its de-rated capacity.
BPC earlier in March 2012 wrote letters to both KPC and KPI inviting them setting up an oil refinery plant in Bangladesh.
Bangladesh currently imports around 6.0 million tonnes of refined and crude oil combined every year to meet the growing domestic demand, said sources.
BPC imports 1.4 million tonnes of crude in total from Saudi Aramco and Abu Dhabi National Oil Company.
Saudi Aramco and ADNOC are supplying 700,000 mts of crude each, Siddique said.
It 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 in order to meet the rising demand, especially for oil-fired power plants.
Amid fast-depleting natural gas resources, Bangladesh in 2010 launched a drive for more oil-based power plants and nearly three-dozen of those plants most of which have already come online.
The new oil-fired power plants alone require over 2.0 million mts of oil products -- around 1.2 million mts of fuel oil and 0.8m mts of gasoil -- to generate electricity, BPC statistics spells out.
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