Chinese oil giant Sinopec is eyeing to team up with French company Technip to jointly build a new 3.0 million tonnes per year (Mtpa) capacity crude oil refinery worth US$1.15 billion (Tk 89.49 billion) in Chattogram.
Sinopec has already completed preliminary negotiations with Technip to build a consortium for the construction of the proposed refinery, a senior official of Bangladesh Petroleum Corporation (BPC) told the FE on Tuesday.
He, however, said Technip would be the leader in the consortium.
To build the refinery, Technip submitted the technical document last week and the financial document is expected to be submitted by May 30, he said.
Once implemented, the new refinery could help the country save $220 million every year, trebling the country's crude oil refining capacity to 4.5 Mtpa from existing 1.5 million tonnes per year.
The state-run BPC and the government would provide necessary funding to implement the project.
Currently, Bangladesh imports annually around 7.50 million tonnes of crude and refined petroleum products combined to meet local demand.
BPC arranged land for the refinery through purchasing from the Ministry of Industries for Tk 2.30 billion.
Officials said the refinery could enable the country to process any kind of crude oil and it might put Bangladesh on the path to becoming a refined petroleum product exporting country.
Nepal has already shown interest to import refined petroleum products from Bangladesh and agreed to ink a memorandum of understanding (MoU) in this regard.
Surplus finished petroleum products can be exported to Sri Lanka, Bhutan, Myanmar and the north-eastern parts of India as well, said officials.
They also said although the project was planned in 2015 and a MOU between BPC and Technip was inked on November 11, 2015, it did not get pace due to non-assurance of funding.
The BPC later decided to build it with own fund having support from the government to give momentum to the project works.
To expedite the project work, the BPC on April 19, 2016 assigned Indian consulting firm Engineers India Limited (EIL) as the project management consultant (PMC) to implement the project.
The BPC would have to pay around Tk 1.61 billion to the EIL against the PMC fee, which include US$ 16.54 million plus Tk 82.28 million inclusive of local taxes, within three years.
The BPC on January 18, 2017 assigned Technip to carry out the front end engineering and design (FEED) for the proposed refinery at a cost of US$ 32.10 million.
Technip has submitted the final FEED over the refinery project, which has also been reviewed and accepted by the BPC after consultation with the PMC.
Officials said a consortium of three French companies led by Technip had installed the first unit of the ERL, which is also the country's sole refinery, having the crude oil refinery capacity of 1.5 Mtpa in port city Chattogram.
The first unit started commercial operation in 1968 with 30 years' economic life.
The first unit is, however, still in operation, having a de-rated capacity of around 1.4 Mtpa.
Azizjst@yahoo.com