BPC to sign deal with China Petroleum today

Bangladesh Petroleum Corporation (BPC) is set to sign a contract with China Petroleum Pipeline Bureau (CPPB) today (Thursday) for building a Single Point Mooring (SPM) in the Bay of Bengal to carry petroleum products onshore.
SPM is an infrastructure, which will be built in the Bay of Bengal, from where petroleum products will be carried through pipelines from mother vessels - to be moored from offshore to oil storage tanks onshore.
BPC has already received an unsolicited technical offer from CPPB and signed a memorandum of understanding (MoU) on September 29, 2014, for building the SPM in the Bay of Bengal.
"It will save around Tk5b per year by reducing pilferage from transportation of oil and have the capacity to unload imported petroleum fuels in two days, which usually needs 11-15 days with the existing facilities," a senior official of BPC said.
BPC initiated the SPM for handling crude oil from Kutubdia Island to Patenga in Chittagong in a bid to tackle oil pilferage and reduce time for fuel oil supply across the country, he added.
After delay of over five years, the government has now set a target to implement the project by 2018.
According to the plan, the state-owned company will set up a 107km pipeline under the SPM project with investment from the Chinese EXIM Bank.
Earlier, BPC signed a memorandum of understanding (MoU) with CPPB on September 29, 2014, for building the SPM, however, the government has taken up the plan five years back and carried out a technical and financial survey of this project.
In 2011, BPC appointed ILF Engineering Consultancy, a German firm, to study the details for installing the SPM at a cost of €7.184m.
ILF meanwhile has recently carried out a fresh study and suggested changes in the project's volume which will push up cost.
"German firm suggested building two more separate 18 and 10 inch-diameter product pipelines at the outer anchorage in the Bay to Moheshkhali Island to carry both crude and refined petroleum products onshore," a senior official of the BPC said.
If these lines are built, the project implementation cost will go up to around to $446.14m, which is almost three times higher than the initial estimation, he added.
"It is huge one compare to the Pakistan's experts observation, the government had initially estimated that the construction cost would at around $136m," the official said.
Islamic Development Bank (IDB) had subsequently agreed to provide $129m to help install the SPM near Kutubdia Island in the Bay of Bengal.
But the estimated cost grew later when German firm ILF Consulting Engineering carried out a detailed study on the proposed SPM and re-estimated the project cost at $327m.