Refinery project in Ctg put on the back burner

The government's indecisiveness over the mode of selecting contractor is delaying the construction of the proposed 3.0 million tonne capacity refinery in Chattogram.
State-run Bangladesh Petroleum Corporation, or BPC, could not yet decide on whether the contractor will be selected through the tendering system or negotiations bypassing the tender, said sources.
French firm Technip is willing to build the refinery and has already held talks with the BPC several times for its selection in an unsolicited way.

It has recently proposed to build the new refinery at an estimated cost of US$ 2.23 billion which is, however, around 20 per cent lower than its previous estimation of around $2.80 billion, a senior BPC official told the FE on Sunday.
But the Indian project management consultant of this project has opined that the cost might be significantly lower if it is built through tendering, he added.
Indian consulting firm, Engineers India Limited, or EIL, has estimated that the cost might be around $1.80 billion if the engineering, procurement and construction, or EPC, contractor is selected through the competitive tendering system.
The project is expected to be funded by the government and BPC.
The contract tenure of the IEL has already been extended by four more years totalling it to seven due to the delay.
Consultancy cost has also more than doubled to around Tk 2.56 billion.
The front end engineering and design, or FEED, for the refinery, however, has been completed.
Technip carried out the engineering work, which had been reviewed and accepted by the BPC after having consultations with the EIL.
Technip carried out the engineering work for the proposed refinery at a cost of Tk 2.57 billion (US$ 32.10 million).
As per the agreement, EIL has to conduct a feasibility study on the refinery, decide on the plant's configuration and help the BPC select an engineering, procurement and construction contractor, said a senior BPC official.
The EIL is responsible for overall supervision of the implementation of the new refinery in Chattogram, the official added. The contract value is Tk 1.10 billion (US$14.03 million).
Officials said the project was initiated in 2015 and a memorandum of understanding was signed between the BPC and the Technip on November 11, 2015.
To expedite the project work, the BPC on April 19, 2016 assigned the Indian consultancy to manage the project.
The BPC on January 18, 2017 assigned Technip to carry out the design work for the proposed refinery.
After completing the engineering and design work, officials said, Technip has proposed the corporation to build the refinery.
Chinese Sinopec has been considering partnering with Technip to jointly build the refinery.
Sinopec has already completed preliminary negotiations with the Technip to build a consortium for the construction, where Technip would be in the lead.
Once implemented, the new refinery could help the country save $220 million every year, trebling the country's crude oil refining capacity to 4.5 million tonnes from existing 1.5 million tonnes per year.
Currently, Bangladesh imports around 6.50 million tonnes of crude and refined petroleum products a year to meet the local demand.
The BPC purchased land for the refinery at Tk 2.30 billion from the ministry of industries.
The refinery can enable the country to process any kind of crude oil and become an exporter of refined petroleum products.
Nepal has already shown interest to import refined petroleum products from Bangladesh.
The surplus finished petroleum products can be exported to Sri Lanka, Bhutan, Myanmar and the north-eastern states of India as well, said officials.
A consortium of three French companies led by Technip had installed the first unit of the ERL, which is also the country's sole refinery. The first unit started commercial operation in 1968 with an economic life of 30 years.
The first unit is, however, still in operation, having a de-rated capacity of around 1.4 million tonnes.
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