IDB to give $133m for laying undersea pipeline

http://www.thefinancialexpress-bd.com/2009/10/20/82074.html

IDB to give $133m for laying undersea pipeline

FE Report

The government is eyeing Islamic Development Bank (IDB) funding worth US$ 133 million for laying an undersea pipeline. The pipeline will be used for carrying petroleum to shore from mother vessels at the outer anchorage in the Bay of Bengal, officials said Monday.

“Jeddah-based IDB, the country’s long-term financer of fuel import bills, has agreed in principle to provide funding to lay down the pipeline,” Bangladesh Petroleum Corporation (BPC) Chairman Anwarul Karim told the FE Monday.

He said the pipeline, once installed, would reduce unloading time and costs and also handling losses.

A single-buoy unloading facility near Kutubdia, some 60 km off the coast in the Bay of Bengal, would also be set up for uninterrupted supply of petroleum through the undersea pipeline, said the BPC top brass.

Smaller vessels currently ferry petroleum to the shore from larger vessels moored at the outer anchorage.

Initially the pipeline would carry only crude oil to the BPC depots located at Chittagong shore, said a senior BPC official.

He said the BPC has a vision to carry refined petroleum too through the proposed undersea pipeline.

The facility will save the BPC around $8 per tonne incurred for loading and unloading.

It would help saving foreign currency to the tune of $9.6 million annually from the first year of installation as the BPC imports 1.2 million tonnes of crude oil every year.

The BPC pays $5.50 per tonne to the lighter vessels owned by state-owned Bangladesh Shipping Corporation (BSC) to carry petroleum to the shore apart from other costs.

The pipeline would help reduce unloading time for a mid-size tanker to only two-three days from existing 12-15 days.

The country’s oil imports will go up by 33 per cent from 3.65 million tonnes this year to 4.85 million mt next year when the new thermal power plants will come into operation.

The total under water pipeline project cost would be $140 million – of which the IDB is expected to provide $133 million, while the remaining will be funded by the government.

International tender would be floated to lay down the undersea pipeline immediately after the loan is sanction from the IDB, BPC officials said.

When contacted the newly appointed IDB field representative in Bangladesh Farook uz Zaman said the IDB loan appraisal team will visit Dhaka next week in this connection.

Out of the country’s total 3.65 million tonnes of imported oil — 2.45 million tonnes refined oil and 1.20 million tonnes of crude oil.