BPC refinery project raises eyebrows

Notwithstanding a five-year delay in establishing the second unit of the Eastern Refinery Ltd (ERL), with a capacity to handle three million metric tonnes of crude oil, the government is planning to establish another refinery near Payra port at Patuakhali. The BPC has already earmarked 1,000 acres of land in Patuakhali near Payra port for the new refinery, with a capacity to handle five million tonnes of crude oil. Along with the refinery, a strategic reserve will be established there to store the necessary oil reserves to deal with emergencies. The second unit of the ERL, which was supposed to be established to stave off dependency on imported oil, is yet to be established, thanks to a plethora of bureaucratic tangles. The government still has not appointed a project management consultant (PMC) for the second unit of the ERL even though the minister in charge of the energy ministry, Prime Minister Sheikh Hasina, approved the installation of the second unit on June 12, 2014. The approval was given under the Speedy Supply of Power and Energy (Special Provision) Act, but the project has nevertheless been delayed. Again, the Bangladesh Petroleum Corporation (BPC) took up the project to establish a single point mooring with double pipeline project in Chittagong to save foreign currency in importing fuel oil a few years back. This project has not materialised yet.
BPC chairman Mahmud Reza Khan told The Independent that the plan to establish a new refinery has been chalked out to ensure future energy security. He said after the Arab-Israel war, known as the Yom Kippur war, broke out in 1973, the prices of oil shot up rapidly in the world. The members of the Organization of Arab Petroleum Exporting Countries proclaimed an oil embargo, he added.
“The embargo caused an oil crisis, or ‘shock’, with many short- and long-term effects on global politics and the global economy. Many large economies across the world then started thinking about alternative options for energy security,” he said. He added that Japan then extensively took up its nuclear power programme, as did many of the European countries, including Germany. The UK, too, then started extracting oil from its strategic oil reserves in the North Sea.
“The issue of energy security has become one of the foremost important issues in the world now. Bangladesh’s gas is decreasing and the time has come for us to think about securing our energy future. The proposed refinery at Patuakhali will have a strategic oil reserve, which will strengthen the country’s energy security.” The BPC chairman said Bangladesh currently has energy security for 45 days. “It means if there is any global oil crisis and any sort of embargo, Bangladesh has strategic reserves of oil for 45 days. We plan to double this with the implementation of the Patuakhali reserve.” Talking to The Independent, an official of the energy ministry—who preferred to remain unnamed—expressed concern about the practicality of establishing a new refinery unit. He observed that most of the projects that BPC has taken up in the last five years have either been cancelled or are mired in red tape. The attempt to take up a new project would only add complexity and nothing else, claimed the energy ministry official.

 

BPC refinery project raises eyebrows

Notwithstanding a five-year delay in establishing the second unit of the Eastern Refinery Ltd (ERL), with a capacity to handle three million metric tonnes of crude oil, the government is planning to establish another refinery near Payra port at Patuakhali. The BPC has already earmarked 1,000 acres of land in Patuakhali near Payra port for the new refinery, with a capacity to handle five million tonnes of crude oil. Along with the refinery, a strategic reserve will be established there to store the necessary oil reserves to deal with emergencies. The second unit of the ERL, which was supposed to be established to stave off dependency on imported oil, is yet to be established, thanks to a plethora of bureaucratic tangles. The government still has not appointed a project management consultant (PMC) for the second unit of the ERL even though the minister in charge of the energy ministry, Prime Minister Sheikh Hasina, approved the installation of the second unit on June 12, 2014. The approval was given under the Speedy Supply of Power and Energy (Special Provision) Act, but the project has nevertheless been delayed. Again, the Bangladesh Petroleum Corporation (BPC) took up the project to establish a single point mooring with double pipeline project in Chittagong to save foreign currency in importing fuel oil a few years back. This project has not materialised yet. BPC chairman Mahmud Reza Khan told The Independent that the plan to establish a new refinery has been chalked out to ensure future energy security. He said after the Arab-Israel war, known as the Yom Kippur war, broke out in 1973, the prices of oil shot up rapidly in the world. The members of the Organization of Arab Petroleum Exporting Countries proclaimed an oil embargo, he added. The embargo caused an oil crisis, or shock, with many short- and long-term effects on global politics and the global economy. Many large economies across the world then started thinking about alternative options for energy security, he said. He added that Japan then extensively took up its nuclear power programme, as did many of the European countries, including Germany. The UK, too, then started extracting oil from its strategic oil reserves in the North Sea. The issue of energy security has become one of the foremost important issues in the world now. Bangladeshs gas is decreasing and the time has come for us to think about securing our energy future. The proposed refinery at Patuakhali will have a strategic oil reserve, which will strengthen the countrys energy security. The BPC chairman said Bangladesh currently has energy security for 45 days. It means if there is any global oil crisis and any sort of embargo, Bangladesh has strategic reserves of oil for 45 days. We plan to double this with the implementation of the Patuakhali reserve. Talking to The Independent, an official of the energy ministrywho preferred to remain unnamedexpressed concern about the practicality of establishing a new refinery unit. He observed that most of the projects that BPC has taken up in the last five years have either been cancelled or are mired in red tape. The attempt to take up a new project would only add complexity and nothing else, claimed the energy ministry official.