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Much Delayed ERL 2nd Unit

BPC to appoint new EPC soon

Published : Sunday, 25 September, 2022 at 12:00 AM  Count : 573
Nurul Amin

CHATTOGRAM, Sept 24: State-owned Bangladesh Petroleum Corporation (BPC) would soon appoint a new Engineering and Procurement Contractor (EPC) for the construction of the second unit of Eastern Refinery Limited (ERL), said BPC officials.
Since 2010, the estimated cost of ERL's 2nd unit, escalated by 10 times to over Tk 19,400 crore, said officials. They said that Technip of France, earlier appointed as EPC, declined to continue for manpower shortage. In 2017, Technip had signed an agreement with BPC. Technip informed Bangladesh Government about its decision not to continue as EPC three months back, they said.
BPC sources said that the Development Project Proposal (DPP) of the unit was recast a dozen times in last 12 years,  by the Ministry of Energy and Mineral Resources a dozen times in last 12 years. BPC expects to be submit the DPP to the Executive Committee of National Economic Council (ECNEC)  soon for approval. The project's first DPP was submitted to the Ministry for approval in 2016 and since then it was recast, revised and amended with approval from  the Prime Minister, said BP sources.  
The latest revised DPP was submitted to the ministry in January. Since 2010, If approved, the project will be implemented in five years ending in December 2026. Bangladesh incurred huge losses due to  delay in setting up ERL's second unit. BPC pays ERL Tk 142 per barrel ( 159 litres)  of refined petroleum. BPC imports crude as well as refined petroleum. It supplies crude petroleum to ERL for refining. It also supplies refined petroleum products three marketing companies,  Padma, Meghna and Jamuna.
To meet the growing demand for fuel oil, the government set the target of  importing 16 lakh tonnes of crude and 58.50 lakh tonnes of refined oil in the current year The project with an estimated cost Tk 19,400 crore, would be implemented in five years, ending December 2026.
The Energy Ministry sources said that the tenure of the Engineers' India Limited of India, the consultants, has been extended by four years, ending 2024. The ERL unit would be built with domestic resources, said officials. Established in 1967, ERL can refine diesel, octane, kerosene, petrol, furnace oil, lubricants, bitumen, liquefied petroleum gas and other products. Out of annual demand of over 74 lakh tonnes of fuel oils, 20 per cent is refined by ERL. BPC imports refined oil worth over Tk 3,000 crore annually. The Engineers' India Limited prepared the DPP of the project.










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