China Machinery Engineering Corporation (CMEC), a state-owned firm of China, has shown interest to implement the $325 million single-point mooring (SPM) project at deep sea to supply crude oil directly to Eastern Refinery Limited and improve the unloading facility at the outer anchorage.

The CMEC expressed its interest through a letter sent to Prime Minister Sheikh Hasina through its Bangladesh chapter chief representative Zhong Guangzhou on December 3.

“Since Islamic Development Bank (ADB) is not willing to finance the increased cost, we will arrange the full fund on soft terms to implement the project,” the CMEC Bangladesh chief said.

“The soft loan, at a flat interest rate of 5.1 percent to be arranged by CMEC would save nearly $144 million of interest over the project period,” he offered. It was feared that the SPM project might be on hold as the external resources division looks for donors’ aid to implement the scheme.

The Economic Relations Division (ERD) sought more donor funds to implement the project as its cost now stands at $325 million, rising from $129 million,” Project Director GMA Afzal told earlier.

The project aims at facilitating hassle-free petroleum transportation from oil tankers to the ERL near Chittagong port through underground pipeline.

SPM cost increased as the ERL would require installing tank terminal, pump and pipelines permanently instead of direct pumping from tanker, the PD told daily sun.

The refinery would also install 103-kilometre pipeline instead of 77 kilometres between Matarbari of Kutubdia in Cox’s Bazar and Anwara in Chittagong.

In the development project proposal, the government initially estimated $129 million to install the terminal in 2010.

Bangladesh Petroleum Corporation initiated the project to handle crude oil from Kutubdia Island to the refinery to ensure the unloading of crude oil and finished products safely and in a cost-effective way. It was also aimed at tackling oil pilferage and reducing time for oil supply across the country.

The IDB assured to provide $129 million as a soft loan for the project. The rest was supposed to come from the BPC and other donors.

The BPC would not need to rely on other countries for handling imported oil after establishing the terminal, another ERL official said.

The state-run corporation would also be able to save Tk 4.5 billion to Tk 5.0 billion per year by reducing pilferage from transportation of oil as well as reaching at the break-even point within 15 years after setting up the terminal, he added.

Once built, the terminal would be able to handle 120,000 tonnes of oil per month, officials said.

A BPC official alleged that the installation was delayed as a number of businessmen, blessed with some ruling-party leaders, are controlling the loading and unloading of petroleum products.

News: The Daily Sun/Bangladesh/13th-Dec-12