Tk 80b SPM idle as BPC delays contractor hire

The country's maiden single-point mooring (SPM) project faces further delays in starting formal operations as the authorities continue to defer the process of selecting a contractor for operations and maintenance (O&M), sources said.

The Tk 80 billion energy infrastructure has remained idle for nearly a year despite successful commissioning in April 2024 and formal handover in August, resulting in significant financial losses for state-run Bangladesh Petroleum Corporation (BPC).

The delay is now being prolonged further, as BPC has pushed the bid submission deadline for appointing an O&M contractor to July 8 from the original June 19.

According to officials, Chinese firm China Petroleum Pipeline Engineering Co Ltd (CPPEC) completed construction of the SPM with double-pipeline system and handed it over to the BPC last year.

The SPM system enables direct offshore unloading of imported petroleum into onshore tanks-cutting both time and costs drastically.

CPPEC was awarded the project without competitive bidding under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010. The project's final cost swelled by 60 per cent to Tk 80 billion from the initial Tk 50 billion.

It was funded by a $554 million Chinese concessional loan, including $467.84 million in preferential buyers' credit and $82.5 million in soft loan, through China Exim Bank, to be repaid in 20 years at 2.0 per cent interest with a five-year grace period.

Despite the infrastructure being ready, the absence of an O&M contractor has stalled operations, forcing BPC to continue using small lighterage vessels to carry petroleum from deep-sea mother vessels to its storage tanks-at a cost of $5.50 per tonne.

Officials said the SPM system, once operational, will allow BPC to unload 100,000-deadweight-tonne tankers within 48 hours, compared to the current 11 days, eliminating the need for costly lighter vessels.

The move is expected to save around Tk 8.0 billion ($75.50 million) annually in fuel transport costs alone.

The SPM installation includes a 220-kilometre pipeline, much of it under the Bay of Bengal, and six storage tanks with a total capacity of 240,000 tonnes-150,000 tonnes for crude oil and 90,000 tonnes for gasoil (diesel).

Previously, Bangladesh's imported petroleum products could not be directly offloaded into Chattogram's onshore tanks.

Large tankers anchored at sea while smaller vessels handled ferrying. The SPM will change this by allowing direct offloading of 120,000 tonnes of crude oil in 48 hours and 70,000 tonnes of diesel in 28 hours.

Bangladesh imports around 7.0 million tonnes of crude and refined petroleum annually to meet the growing domestic demand of its expanding economy.

Project Director Md Sharif Hasnat, also Managing Director of Eastern Refinery Ltd (ERL), was unavailable for comment on the reasons behind the delay in appointing the O&M contractor or the continuation of costly fuel transfer arrangements.

Azizjst@yahoo.com