FE Report
Bangladesh and China will strike the much-expected framework agreement on a concessional loan for building a single-point mooring (SPM) in the bay to facilitate oil import.
Officials said the SPM, to be built with Chinese finance worth around US$554 million, will facilitate carrying petroleum products from vessels far offshore to an onshore terminal directly. Thus, the facility is expected to cut down overall oil-import costs by way of offloading imported fuel quickly.
Economic Relations Division or ERD and the Export-Import Bank of China are set to sign the deal at Sher-e-Bangla Nagar in Dhaka.
China Petroleum Pipeline Bureau (CPPB), the contractor to build the SPM system and associated facilities, is to complete the project, titled 'Installation of Single Point Mooring with Double Pipeline', at a cost of around US$554 million by 2020, a senior official at the state-run Bangladesh Petroleum Corporation (BPC) said.
Of the total loan amount, China is set to provide $467.8 million as preferential buyer's credit and the remaining $82.5 million as soft loan.
"Once built, the SPM is expected to save the country around Tk 8.0 billion per annum," said the BPC official.
Currently, BPC cannot offload imported fuel oil at its Chittagong refinery depot directly.
Large tankers anchor in deep sea and smaller ships unload and bring the oil to storage facilities of the Eastern Refinery Ltd (ERL).
It takes up to seven days to offload oil from tankers and the BPC, very often than not, has to pay fines for the extra time taken, he said.
After installation of the SPM it will be possible to offload 120,000 tonnes of crude oil within 48 hours and 70,000 tonnes of diesel within 28 hours.
The SPM's capacity to offload oil annually will be 9.0 million tonnes.
Officials said the CPPB has already hired survey ship from Singapore to carry out the survey, purging out confusion over delay in the project, they added.
The government awarded CPPB the project to build the SPM system on December 8, 2016 through inking the final deal to install the SPM with double pipelines as the engineering, procurement and construction (EPC) contractor. The completion timeline is up to 2020.
The CPPB would install the SPM system with twin pipelines on Sonadia Island deep into the Bay of Bengal where large oil tankers will anchor.
Two 36-inch-diameter and 16-km pipelines would be built to carry both crude and gasoil separately from the SPM to storage facility at Matarbari on the Moheshkhali bay island.
Nine kilometres of the 36-inch-diameter pipelines would be inside the bay and the remaining seven kms on shore.
Two 18-inch-diameter 94-km pipelines would be built to carry both crude and gasoil separately from the storage facility of Matartbari to storage facility on Chittagong shore.
Some 64 kms of the 18-inch-diameter pipelines would be inside the Bay and the remaining 30 kms onshore.
Three new 50,000-cubic-meter-capacity crude-oil storages and three new 30,000-cubic-meter gasoil storages would be built at Moheshkhali.
A new pumping station would be built on the island to pump the fuel in to shore.
BPC's wholly owned subsidiary ERL would implement the SPM project on behalf of the BPC.
The petroleum corporation currently pays $5.50 per tonne to small vessels owned by the state-owned Bangladesh Shipping Corporation to ferry petroleum ashore from larger oceangoing vessels.
The SPM will save BPC around $8 per tonne by eliminating the hassle of vessel transfers, a BPC official said.
Bangladesh annually imports around 6.0 million tonnes of crude and refined oils combined, of which around 1.3 million tonnes are crude and the remaining refined petroleum products.
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