ERL second unit: All processes to be finished by Dec

The government is set to complete all the required processes to begin the construction of the long-delayed Eastern Refinery Limited (ERL) unit-2 by December 25, according to officials at the Energy and Mineral Resources Division (EMRD).

The proposal is now awaiting placement before the Executive Committee of the National Economic Council (ECNEC) for approval, which may take a few more weeks.

"We would like to complete all the processes to begin the ERL second unit's construction at the existing venue in Chattogram by December," EMRD Secretary Mohammad Saiful Islam told The Financial Express.

ERL refined 1.535 million tonnes of crude oil in FY25.

The volume is expected to nearly double once the second unit comes into operation.

The unit is likely to be awarded to a joint venture or a single international firm.

The government has already held discussions with representatives from the United Arab Emirates (UAE), Saudi Arabia, and Japan, according to EMRD sources.

Bangladesh Petroleum Corporation (BPC) will provide $1.5 million in seed funding for the unit, while the rest will come from the government's annual budgetary allocations.

The move to award the new unit to a joint venture or a single international firm follows the cancellation of a controversial agreement with S Alam Group.

The deal, signed under the Awami League government, faced criticism after allegations surfaced that the conglomerate was involved in bank takeovers, money laundering, loan fraud, and financing election campaigns.

Several of its top executives, along with ministers and MPs of the Sheikh Hasina-led administration, went into hiding after the interim government assumed office following the July-August 2024 uprising.

ERL, Bangladesh's sole refinery in Chattogram, was approved in 1960 and began operations in 1968.

During its inception, 35 per cent was owned by the East Pakistan Industrial Development Corporation, another 35 per cent by a group of private businessmen led by former commerce secretary Abbas Khalili of West Pakistan, and 30 per cent by the UK-based Burmah Oil Company.

Now a fully state-owned subsidiary of BPC, ERL has been running well below the country's growing demand.

Efforts to increase capacity began as early as 2012, as part of a broader strategy to reduce reliance on imported refined fuels.

At present, ERL can refine up to 1.5 million tonnes of crude oil per year, meeting only a fraction of the demand.

It is believed that compared to importing refined fuel, refining imported crude oil domestically saves about Tk 11 per litre, making expansion critical for Bangladesh's energy security and cost efficiency.

jasimharoon@yahoo.com