Design for ERL unit-2

BPC to award today Technip Tk 257cr deal sans tender

Manjurul Ahsan | Published: 01:30, Jan 18,2017

 
 

The state-run Bangladesh Petroleum Corporation, bypassing tenders, will today sign a €30.75 million, equivalent to Tk 257 crore, contract with French company Technip to prepare the engineering design for a refinery unit with a capacity of processing three million tonnes of crude oil every year.
Technip, which built the country’s first refinery with a capacity of processing 1.5 million tonnes per annum in Chittagong in 1968, will prepare the design and relevant documents in six months, an energy division official told New Age on Tuesday.
The petroleum corporation, in line with the engineering design, will then begin negotiations with Technip to build the second unit of refinery, he said.
The energy division plans to provide the funding for engineering design as well as construction of the second refinery unit from the profit made by the petroleum corporation, the officials said, adding that the construction cost of the refinery unit has been estimated at around Tk 16,730 crore.
Being failed in awarding a contract to build the second refinery unit through tenders, the government, in July 2015, decided to process the entire activities of the project under the Speedy Supply of Power and Energy (Special Provisions) Act 2010 that indemnifies officials concerned against prosecution for making decisions.
When asked, the energy division official, however, claimed that the government would examine the costing of similar refineries installed elsewhere in recent past during the negotiations with Technip.
‘The authorities concerned would engage any other reputed company for the job if Technip claims much higher price for engineering, procurement and construction contract,’ he said.
Eastern Refinery Limited, a subsidiary of the Petroleum Corporation, will implement the project and operate the refinery alongside the 48 year old refinery.
On implementation of the project of the new refinery unit, crude processing capacity of the government will increase to 4.5 million tonnes per year and it will bring in the much needed equilibrium between demand and supply of petroleum products in the country, officials said.
It will also ensure production of eco-friendly motor gasoline and diesel and will ensure energy security of the country, they said.
Now, the government supplies 1.2 to 1.3 million tonnes of petroleum products per year after refining crude at the eastern refinery at lower prices. While it also supplies another 3.5 million tonnes of refined products through direct imports at higher rates to meet the country’s demand.
The petroleum corporation, which had been in the red since 1999 due to soaring oil prices in international market, made staggering profits of Tk 7,050 crore in 2015-16.
Though the government has made some price adjustments recently following demands from economists and businesses, the petroleum corporation is still making a huge profit from the sales of fuel oils.
The energy division now plans to spend for new projects of petroleum corporation from the profit whereas the finance ministry wants the money for repaying the outstanding loans the petroleum corporation had been provided over the years by the government.

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