Economic Reporter :
The work of setting up second unit of the Eastern Refinery Limited (ERL), the only state-owned oil refinery in Bangladesh, has been disrupted due to lack of funds.
The installation of the ERL unit-2 was scheduled to be completed by June 2016. But the work of the project worth Tk16,731 crore is not progressing as financial assistance from foreign sources is still at negotiating stage.
Once installed, the unit is expected to refine 4.5m tonnes of petroleum annually.
About the situation, ERL General Manager and Project Director Aktarul Haque told the The New Nation yesterday that the development project proposal (DPP) has been sent to the Planning Commission for approval while negotiation for funds is on-going with several foreign banks and financiers.
“The design of the project will be finalised after the DPP is passed from the Planning Commission, and French company Technip will do the designing,” he said.
Haque added the government has already signed a memorandum of understanding with Technip for the unit.”
He said: “The construction cost will be negotiated with Technip on the basis of the MoU. If both parties reach a consensus, Technip will be awarded the job. Otherwise, the government will look for another company.”
ERL Managing Director Engr. Md Emdadul Haque said: “The unit may take around three years to complete, after the DPP is passed.”
The estimated project cost is Tk16,731 crore, out of which, Tk5,000 crore will be provided by the Bangladesh Petroleum Corporation (BPC) and the remaining Tk11,731 crore is expected to come as project assistance.
Presently, ERL refines 1.3m tonnes of crude oil annually though its capacity of 1.5m tonnes. The BPC annually imports nearly 5m tonnes of crude and refined oil at an average cost of Tk50,000 crore. Technip, which installed the ERL’s first unit, was also given the task of designing the second unit.
The work of setting up second unit of the Eastern Refinery Limited (ERL), the only state-owned oil refinery in Bangladesh, has been disrupted due to lack of funds.
The installation of the ERL unit-2 was scheduled to be completed by June 2016. But the work of the project worth Tk16,731 crore is not progressing as financial assistance from foreign sources is still at negotiating stage.
Once installed, the unit is expected to refine 4.5m tonnes of petroleum annually.
About the situation, ERL General Manager and Project Director Aktarul Haque told the The New Nation yesterday that the development project proposal (DPP) has been sent to the Planning Commission for approval while negotiation for funds is on-going with several foreign banks and financiers.
“The design of the project will be finalised after the DPP is passed from the Planning Commission, and French company Technip will do the designing,” he said.
Haque added the government has already signed a memorandum of understanding with Technip for the unit.”
He said: “The construction cost will be negotiated with Technip on the basis of the MoU. If both parties reach a consensus, Technip will be awarded the job. Otherwise, the government will look for another company.”
ERL Managing Director Engr. Md Emdadul Haque said: “The unit may take around three years to complete, after the DPP is passed.”
The estimated project cost is Tk16,731 crore, out of which, Tk5,000 crore will be provided by the Bangladesh Petroleum Corporation (BPC) and the remaining Tk11,731 crore is expected to come as project assistance.
Presently, ERL refines 1.3m tonnes of crude oil annually though its capacity of 1.5m tonnes. The BPC annually imports nearly 5m tonnes of crude and refined oil at an average cost of Tk50,000 crore. Technip, which installed the ERL’s first unit, was also given the task of designing the second unit.
