Engineers India Ltd, an Indian state-owned enterprise, has proposed that Bangladesh should allow it to set up a petroleum refinery unit without tender at the location of the government-owned Eastern Refinery Ltd in Chittagong. The proposed refinery will have a capacity to refine 6 million tonnes of crude oil per year, according to a proposal of the Engineers India. The energy division secretary, Abu Bakar Siddique, on Tuesday forwarded the proposal in this regard to the state minister for energy and power Nasrul Hamid.
BPC chairman Md Eunusur Rahman told New Age a project processing committee was there headed by the energy division secretary Abu Bakar Siddique to deal with such proposals.
The government, after assuming power for a successive second term in January 2014, decided to set up a second unit with 3 million tonnes refining capacity at the existing refinery owned by Eastern Refinery Limited under Speedy Supply of Power and Energy (special provision) (Amendment) Act 2014.
ERL is a subsidiary of the state-run Bangladesh Petroleum Corporation.
The government, after failing to expand the capacity of ERL in about two decades through a tendering process, now plans to implement the project by 2016 under the controversial speedy supply act.
Critics said that the government was using the act to protect the officials and policymakers so that they would not be legally accused of possible anomalies in awarding the projects in power and energy sector.
ERL can refine 1.5 million tonnes of crude oil annually while the country’s demand is some 5.5 million tonnes of refined petroleum products.
The government has to pay at least Tk 6-7 per litre in excess to import refined petroleum products which could be saved if the entire demand could be met by refining imported crude oil.
In the proposal, Engineers India suggested to set up a unit with 6 million tonnes refining capacity instead of installing the planned 3 million tonnes capacity unit to make the project financially more viable.
The Indian company also offered that it could approach India’s Exim Bank for funding the project through Buyer’s Credit under National Export Insurance Account, the proposal said.
The company will submit a detailed proposal after government would finalises the execution philosophy of the project based on the configuration and capacity of the refinery unit, officials said.
-With New Age input
