BD seeks alternative crude oil sources

Bangladesh has asked its crude oil suppliers to suggest alternative sources as rising security risks around the Bab el-Mandeb Strait are forcing Middle East shipments to take longer and more costly routes.

Bangladesh Petroleum Corporation (BPC) Chairman Md Rafiqul Islam said the country would face no fuel shortage until December, as it has sufficient stocks and confirmed import orders.

He said BPC had already begun discussions with representatives of different companies to explore alternative sources of crude oil.

BPC started looking for alternative sources after the Middle East crisis escalated in March. Following tests of crude from different countries, Eastern Refinery found that oil from four countries �" Nigeria, Malaysia, Norway and Algeria �" was compatible with its existing refining process. 

The refinery tested Nigeria's Bonny crude, Malaysia's Malaysian Blend, Norway's Alvheim Blend and Algerian crude and found that all four could be processed using its existing facilities.

Eastern Refinery currently processes Arabian Light crude from Saudi Arabia and Murban crude from the United Arab Emirates. The refinery has the capacity to process around 1.4-1.5 million tonnes of crude oil a year.

The alternative crude sources could help Bangladesh reduce its dependence on shipments through the Bab el-Mandeb Strait, where security risks are forcing vessels to take longer routes.

Eastern Refinery submitted its test findings to BPC in early April.

The refinery's existing crude grades are used to produce 13 types of petroleum products, including diesel, bitumen and petrol.

The need to diversify crude sources has become more pressing as Bangladesh-bound fuel vessels are taking longer and costlier routes to avoid security risks around the Bab el-Mandeb.

Bangladesh Shipping Corporation's crude oil tanker MT Ninemia, carrying nearly 100,000 tonnes of crude, recently arrived at Chattogram port after taking an alternative route through the Suez Canal, the Mediterranean, the Strait of Gibraltar and around the Cape of Good Hope.

The voyage took around 50 days and incurred an additional cost of Tk 66.63 crore.

The vessel could have reached Chattogram from Yanbu in around 13-15 days had it sailed through the Bab el-Mandeb and the Indian Ocean.