Govt plans to build five oil pipelines by 2020

| Updated: October 22, 2017 17:48:14

Photo collected from internet has been used for representational purpose only. Photo collected from internet has been used for representational purpose only.

The government is working to build five major oil-carrying pipelines having the total length of over 600 kilometres (km) at a cost of around Tk 81.21 billion by 2020, officials said.


Setting up of these oil pipelines will help boost petroleum product transport smoothly across the country at reduced cost, they added.


The pipelines include four intra-country pipelines and a cross-country pipeline with neighbouring India, Bangladesh Petroleum Corporation (BPC) director for operations and planning Sayed Mohammad Mozammel Haque told the FE.


Of the proposed pipelines, a 237-km pipeline is planned to carry diesel from Chittagong to Dhaka, a 17-km pipeline to carry jet fuel from Pitloganj of Narayanganj to Kurmitola aviation depot, two


110-km pipelines to be constructed under single-point mooring (SPM) system to carry crude oil and diesel from vessels far offshore to an onshore terminal in Chittagong and a 130-km pipeline to carry diesel from India's Numaligarh refinery to Parbatipur in northern Bangladesh, he said.


Currently, Bangladesh depends on coastal tankers, railway wagons and tank lorries to carry both crude and refined oil products to end-users after importing from global suppliers in Chittagong depots as it has no major oil carrying pipeline.


Small barges, mostly owned by the private sector, have also been carrying petroleum products on various river routes.


It costs BPC around Tk 1.4 billion ($17.8 million) annually to transport fuels around the country, sources said.


But this could be cut once the pipeline is built, the BPC official said.


Bangladesh now consumes around 6.0 million tonnes annually and the demand is mounting due to growing domestic oil demand, he said.


Once laid down, these pipelines would help check delay in oil deliveries to end-users, traffic congestion, accidents during transportation and other unforeseen bottlenecks like natural disaster, strike, industry owners said.


The proposed Dhaka-Chittagong 237-km pipeline is planned to carry mostly diesel to the tune of around 3.0 million tonnes per year.


The pipeline is set to carry diesel from BPC's oil terminal in Chittagong to Godnail tank terminal in Narayanganj, Dhaka, to cut cost and time in fuel transportation.


The pipeline is planned to be built at a cost of Tk 25 billion by 2020, the official said.


The proposed 17-km jet fuel carrying pipeline is planned to carry the fuel dedicated coastal tankers from main storage infrastructure in the port city to the proposed pumping facilities at Pitolganj.


Fuel will be unloaded into the storage tank of Pitolganj pumping facilities, which will be refuelled to national and international aircraft at Hazrat Shahjalal International Airport (HSIA).


The planned pipeline would be built at a cost of Tk 2.0 billion within one year by 2018, he added.


China Petroleum Pipeline Bureau, CPPB, is currently carrying out works as the contractor to build two 110-km pipelines under the SPM.


Under the project, a pipeline end manifold, or PLEM, one refined oil-storage tank, one crude oil storage tank, a pump station would also be built at Moheshkhali island in the Bay of Bengal.


A supervisory control and data acquisition system would also be installed under the project.


The pipelines would be constructed 73 km in offshore and 37 km onshore and the cost would be around Tk 54.21 billion (US$695) along with the SPM system, he added.


The SPM project is expected to be completed by 2020, he added.


The SPM will save BPC around $8 per tonne by eliminating the vessel transfers, a BPC official said.


It will also cut unloading time by two-three days from current 11-12 days, which will ultimately increase BPC's handling capacity.


BPC currently pays $5.50 per tonne to small vessels owned by state-owned Bangladesh Shipping Corporation (BSC) to ferry petroleum to shore from larger ocean-going vessels.


Officials said Chinese EXIM Bank would provide around 80 per cent of the total project cost while the remaining amount would be arranged by the Bangladesh government.


Bangladesh and India are currently working to build the proposed 130-km cross-country pipeline to carry diesel from India's Numaligarh refinery to Bangladesh.


India's state-run Bharat Petroleum Corporation Ltd (BPCL) will bear the entire costs for construction of the pipeline, of which 125-km pipeline will be inside Bangladeshi border and the remaining 5-km in India.


In return, BPC would import diesel from the BPCL-owned Numaligarh refinery for 15 years.


Indian diesel would be consumed by clients around Parbatipur localities in northern region, once the pipeline is constructed, he said.


A 150MW gasoil-fired power plant would also be built at Syedpur to consume Indian gasoil, he added.


Diesel demand is around 1.10 million tonnes in 16 northern districts in Bangladesh, the BPC official said.


Initially, the pipeline is planned to carry around 300,000 tonnes of diesel to Bangladesh, which would gradually be increased to 1.0 million tonnes.


This pipeline project is expected to be completed by 2020, he added.


BPC currently imports around 3.5 million tonnes per year of diesel from around a dozen oil suppliers mostly of Middle East and Asian origin.


A-1 jet fuel demand in Bangladesh is around 300,000 tonnes per year.


BPC usually gets diesel and jet fuel through imports from international suppliers and as an output from its wholly-owned subsidiary Eastern Refinery Ltd (ERL), which is the country's sole refinery.


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