Construction work of 2nd unit of ERL to start soon

In order to ensure energy security the government is going to start the construction of the second unit of Eastern Refinery Limited (ERL). Engineers' India Limited of India has prepared a Development Project Proposal (DPP) which is now waiting for approval of the ministry, an official said. A top official said the DPP of the second unit would be approved by the ministry very soon. The new unit will have a capacity to process 3 million metric tonnes of crude oil per year, the physical work of which may start by September.

As per DPP, the project cost has been estimated at Tk 18,653 crore. Of them taka 7,190 crore has been earmarked for construction of building, road, and land development. The DPP has been further earmarked Tk 660 crore for customs duties, taka 1343 crore for VAT, taka 225 crore for purchasing chemical goods, and others for registration, vehicles, telecommunication, electrical goods etc.

State-owned Bangladesh Petroleum Corporation Chairmen Mohammad Shamsur Rahman told Bangladesh Post, “Technip of France has submitted technical offer for the appointment as the contractor for the ERL on May 2 last which is now under evaluation. We hope the physical work will be started by September this year, and the total project will be completed within next five years.

It may be mentioned that the second unit of ERL would be built with own financing of the Government of Bangladesh (GOB). After the evaluation, the technip will be appointed as the contractor for construction of the project. Meanwhile, the government has earlier signed an agreement with the Technip of France for preparation of documents on 'Front End Engineering Design (FEED) for construction of the second unit of the Eastern Refinery Limited (ERL). The proposal in this connection was approved in the Cabinet Purchase committee held at the last week of December in 2016.

The design cost around taka 2.69 billion. In this connection another agreement was signed with Technip in 2015 last for construction of the Second unit of ERL. Presently, the existing Eastern Refinery Ltd (ERL), only petroleum refinery plant in the country is meeting around 20 per cent of the national demand while the rest 80 per cent are being imported as finished products.

According to energy division information, the present yearly crude oil processing capacity of the ERL is 1.5 million metric tonnes. In contrast, the current demand of Petroleum Product (POL) stands nearly 6.5 million metric tonnes per year. On implementation of the Unit-2 Project of ERL, crude oil processing capacity of ERL will increase to 4.5 million metric tonnes per year and will bring in the much needed equilibrium between demand and supply of petroleum products in the country. It will also ensure production of eco-friendly motor gasoline and diesel oil and will ensure energy security of the country.

Meanwhile, the Eastern Refinery Limited set up about 50 years back has lost its economic life resulting in the decline of production. Bangladesh Petroleum Corporation has said that plans to build a new refinery in the country in order to meet the growing demand of its population. Sources said the Technip of France had constructed the first unit of ERL in 1967. In the new refinery, three million tonnes of crude petroleum will be refined. The project includes construction of processing units, storage tanks, and installation of pipelines, distillation unit, and other associated facilities.