Single point mooring

Project may miss another deadline

The Single Point Mooring (SPM) project is likely to miss yet another deadline, as no significant progress has been made after the project was approved at a meeting of the Executive Committee of the National Economic Council (ECNEC), on December 8 last year. SPM is an infrastructure project, to be built in the Bay of Bengal, from where petroleum products will be carried through pipelines from mother vessels, to be moored offshore, to oil storage tanks onshore.
Officials with the Bangladesh Petroleum Corporation (BPC) disclosed that the government’s target of implementing the project by 2018 was impossible, as it would require at least three years from the day the project work is launched to complete the Tk. 4,936-crore project.
An official said, preferring anonymity, that the project cost might escalate further and surpass the amount approved in the ECNEC because of the delay. The cost has already increased to nearly four times the amount that the BPC had initially estimated five years ago when it initiated the project.
In May 2011, BPC started the project by appointing ILF Engineering Consultancy, a German firm, to study the details for setting up the SPM. The project completion date at that time was fixed in January 2017.
ILF conducted the feasibility study and found that the cost would be more than three times higher than the amount of Tk. 1,101.6 crore that the government had initially estimated, based on a feasibility study conducted by a Pakistani firm in 2010.
The Jeddah-based Islamic Development Bank (IDB) had initially agreed to provide Tk. 1,044.9 crore to help install the SPM near Kutubdia Island in the Bay of Bengal. Later, after the escalation in the German firm’s estimated cost, the IDB agreed to increase its funding by 70.54 per cent to Tk. 1,782 crore, of the total estimated amount of Tk. 3,613.7 crore.
Since the government failed to arrange additional funding for the SPM project, the IDB left, and the project got delayed.
After that, the government struck an unsolicited deal with a Chinese petroleum firm named China Petroleum Pipeline Bureau (CPP), and signed a memorandum of understanding (MoU) on September 29, 2014, to build the SPM.
The planning ministry then asked the BPC to prepare a fresh development project proposal (DPP), which further put the project on the backburner. Finally, the DPP was tabled and got the ECNEC’s nod in December.
Mosleh Uddin, BPC’s director of planning and development, told The Independent that the CCPB would submit the new financial proposal by March. “After they submit the financial proposal, we will form a committee to negotiate the project cost. Then, after the project cost is fixed, the work will start.”
The BPC’s director conceded that this process of negotiations would take time, adding that it was very unlikely the 2018 deadline would be met. “At least three years would be required to complete the project work from the day it is started,” he admitted.
When asked if the project cost would escalate further by that time, he said he could not predict that. “There is no problem with finance, however, as the Chinese EXIM Bank will finance the project,” he said.

Experts have long pointed out that the installation of the SPM project to transport petroleum from vessels moored at an outer anchorage to depots onshore can save both time and money. This will help in the unloading of crude and refined petroleum products from ocean-going vessels in the deep sea without berthing at the port.
The SPM will have the capacity to unload imported petroleum fuels in two days. Under the existing facilities, this usually requires 11 days. The BPC would also be able to save around Tk. 5 bn per year by reducing pilferage from the transportation of oil.

 

Single point mooring

Project may miss another deadline

The Single Point Mooring (SPM) project is likely to miss yet another deadline, as no significant progress has been made after the project was approved at a meeting of the Executive Committee of the National Economic Council (ECNEC), on December 8 last year. SPM is an infrastructure project, to be built in the Bay of Bengal, from where petroleum products will be carried through pipelines from mother vessels, to be moored offshore, to oil storage tanks onshore. Officials with the Bangladesh Petroleum Corporation (BPC) disclosed that the governments target of implementing the project by 2018 was impossible, as it would require at least three years from the day the project work is launched to complete the Tk. 4,936-crore project. An official said, preferring anonymity, that the project cost might escalate further and surpass the amount approved in the ECNEC because of the delay. The cost has already increased to nearly four times the amount that the BPC had initially estimated five years ago when it initiated the project. In May 2011, BPC started the project by appointing ILF Engineering Consultancy, a German firm, to study the details for setting up the SPM. The project completion date at that time was fixed in January 2017. ILF conducted the feasibility study and found that the cost would be more than three times higher than the amount of Tk. 1,101.6 crore that the government had initially estimated, based on a feasibility study conducted by a Pakistani firm in 2010. The Jeddah-based Islamic Development Bank (IDB) had initially agreed to provide Tk. 1,044.9 crore to help install the SPM near Kutubdia Island in the Bay of Bengal. Later, after the escalation in the German firms estimated cost, the IDB agreed to increase its funding by 70.54 per cent to Tk. 1,782 crore, of the total estimated amount of Tk. 3,613.7 crore. Since the government failed to arrange additional funding for the SPM project, the IDB left, and the project got delayed. After that, the government struck an unsolicited deal with a Chinese petroleum firm named China Petroleum Pipeline Bureau (CPP), and signed a memorandum of understanding (MoU) on September 29, 2014, to build the SPM. The planning ministry then asked the BPC to prepare a fresh development project proposal (DPP), which further put the project on the backburner. Finally, the DPP was tabled and got the ECNECs nod in December. Mosleh Uddin, BPCs director of planning and development, told The Independent that the CCPB would submit the new financial proposal by March. After they submit the financial proposal, we will form a committee to negotiate the project cost. Then, after the project cost is fixed, the work will start. The BPCs director conceded that this process of negotiations would take time, adding that it was very unlikely the 2018 deadline would be met. At least three years would be required to complete the project work from the day it is started, he admitted. When asked if the project cost would escalate further by that time, he said he could not predict that. There is no problem with finance, however, as the Chinese EXIM Bank will finance the project, he said. Experts have long pointed out that the installation of the SPM project to transport petroleum from vessels moored at an outer anchorage to depots onshore can save both time and money. This will help in the unloading of crude and refined petroleum products from ocean-going vessels in the deep sea without berthing at the port. The SPM will have the capacity to unload imported petroleum fuels in two days. Under the existing facilities, this usually requires 11 days. The BPC would also be able to save around Tk. 5 bn per year by reducing pilferage from the transportation of oil.