Bangladesh Petroleum Corporation (BPC) signed a deal with China Petroleum Pipeline Bureau (CPPB) on December 08, 2016 to set up a single-point mooring (SPM) project with a double (110 km) pipeline for the Eastern Refineries Ltd (ERL) and other subsidiary companies of BPC. As reported, the project includes among others two pipelines connecting Patenga, Chittagong, Matarbari (Maheshkhali) and Cox's Bazar covering a distance of 94 km. Within the 94 km pipelines, 64 km pipelines will be submarine. BPC claims that the project once built and made operational, will save BPC approximately Taka 10.00 billion annually.
BPC sources suggest that the present practice of unloading imported petroleum products from mother vessels is cumbersome and time-consuming. A mother vessel with approximate 100,000 tonne capacity waits at the outer anchorage for discharging imported petroleum (crude and refined) for 9-10 days. The petroleum products are then unloaded and transported to BPC and ERL storage facilities through lighter vessels. Such a system is costly, time consuming and inefficient. BPC spends approximately Taka 2000 for per tonne for unloading and transportation of petroleum products from mother vessel to BPC storage facility. Installation of SPM and pipe lines can unload and carry a 100,000 tonne size mother vessel within two days.
According to the aforementioned deal, BPC will set up the SPM with the financial support of the Chinese EXIM Bank by July 2018.The Chinese CPPB will be responsible for building the SPM as an engineering, procurement and construction (EPC) contractor for BPC.
The deal was signed under the 'Speedy Supply of Power and Energy (Special Provision) (Amendment) Bill, 2015'. The main objective of signing the installation of SPM and double pipelines is to ensure that imported crude oil and finished petroleum products are unloaded easily, cheaply, speedily and efficiently. The SPM and pipelines can help unload annually 9000,000 tonnes of petroleum products for BPC. BPC sources inform that the project (installation of SPM with double pipelines) is finally being materialised after 7 years of study. Other than construction of pipelines and SPM, there would be 3 tankers with 50,000 cubic meter storage of crude petroleum, 3 storage tanks for 30,000 cubic meter of diesel and pumping stations built at Matarbari and Cox's Bazar.
Improving storage capacity and efficient unloading and distribution of petroleum products have become extremely important for BPC. Annually, Bangladesh imports almost 5.5 million tonnes of petroleum products. With the increased demands for imported petroleum products, Bangladesh badly needs improved infrastructures to efficiently unload and distribute petroleum products to the consumers. Saving each taka for unloading and transportation of petroleum products has its positive impacts for the national economy. There are clear indications that petroleum products are going to be costlier in the coming years.
Since 2014, petroleum products have been traded worldwide with low prices. But international market has been changing. Fuel oil price in the international market has been experiencing price escalation. The latest deal (November 30, 2016) between OPEC and Russia has caused surge in petroleum price. OPEC which supplies more than one thirds of global oil has decided to cut production by 1.2 million barrels per day from its present 32.5 million barrels from January 2017. Major non-OPEC petroleum exporter Russia has decided to cut output by 300,000 barrels/day. This production and supply restrictions are aimed at stabilising international oil market. Oil prices have surged more than 15 per cent since OPEC and Russia announced their decisions to cut production for the first time in eight years. Experts believe the present price ($50-$60 per barrels of brent crude petroleum) will prevail for few more months in 2017. There are some analysts who like to forecast that oil price will rise considerably in 2017 and beyond. The OPEC and Russian agreement for cutting supply is seen as instrumental to offset supply by increased demand for oil, for the first time in three years. Oversupply has caused market slump since mid-2014. However, there is now a feeling that the market is returning closer to balance.
Bangladesh has been steadily switching to a petroleum import-driven policy for its fuel supply mainly reliant on the depressed international petroleum market for some time. As the local economy has been diversifying and becoming bigger, the country will require efficient transportation and bigger storage capacity for petroleum products. The SPM and pipelines project of BPC may contribute positively towards that endeavour.
The writer, a mining engineer, writes
on energy and environment issues.
[email protected]
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