Oil to be transported from Chattogram to Dhaka by pipeline in March
The project launched to transport fuel oil from Chattogram to Dhaka through pipeline is ending this running month. As much as 250 kilometres of pipeline has been installed already.
Bangladesh Petroleum Corporation (BPC) is planning to transport fuel oil through this new pipeline from March. Once it goes into operation, around Tk 2.36 billion (Tk 236 crore) will be saved.
BPC officials say that the cost of transporting oil will be reduced by this project. Besides, the supply system will be smoother while it will be possible to prevent environment pollution as well.
As much as 2.7 million tonnes (27 lakh tonnes) of diesel would be transported through the pipeline annually. Currently, the demand stands at 2.14 million tonnes (21.4 lakh tonnes).
According to project documents, the project was approved in October 2018. In the beginning, the duration of the project was till December 2020 but the work of the project actually started in 2020.
The project duration was extended till December 2022 in the first go and then till December 2024 in the second go. Initially, the project cost was estimated to be Tk 28.62 billion (Tk 2,862 crore).
However, the cost has now escalated to Tk 36.99 billion (Tk 3,699 crore). This project undertaken by the BPC is being implemented by 24 Engineer Construction Brigade of the Bangladesh Army.
On the matter of the construction starting late, project director Colonel Md Jahangir Hossain told Prothom Alo that some changes were brought in the project after the main construction had begun. After including those changes, the project was approved again in 2020.
The construction had also started the same year but then the work was suspended for almost a year because of the Corona pandemic. That’s why it took four years to complete the project.
While speaking on the matter of cost escalation, this project director said 90 per cent of the equipment for the project is being imported from different European countries.
Also the import procedure is being disrupted because of the Russia-Ukraine war. The price of dollar as well as the equipment has gone up. The project cost has gone up because of all these reason, he added.
According to the documents, there are two sections of the pipeline. One section runs from Chattogram’s Patenga to Godnail Depot in Narayanganj via Feni, Cumilla, Chandpur and Munshiganj.
The other section travels from Godnail to Fatulla in Narayanganj. Apart from the pipeline, there are other equipment including booster pump and nine generators under the same project.
Investment to return in 16 years
It has been learnt from BPC sources that on average the annual demand of fuel oil in the country stands at 6.5 million (65 lakh) tonnes. Meanwhile, 6.7 million (67 lakh) tonnes had been supplied in the last 2023-24 fiscal year. As much as 75 per cent of that was diesel after all.
About 40 per cent of the total demand of fuel oil is used in Dhaka division alone. To transport oil to Dhaka in the current method, it is first transported from Chattogram’s Patenga to Godnail and Fatulla depots in Narayanganj through the waterways.
Then that oil is transported from Narayanganj to Dhaka by road. Around 150 small and large ships are used every month for the transportation. As much as Tk 2 billion (Tk 200 crore) is being spent on this every year.
Project documents say that the project will generate Tk 3.26 billion (Tk 326 crore) in revenue every year. Meanwhile, Tk 900 million (Tk 90 crore) will be spent on different sectors including operation, maintenance, fuel, electricity bill and rent for the land. In this way Tk 2.36 billion (Tk 236 crore) will be saved per year. So, the investment will return within just 16 years.
When asked, BPC-designated project director Md Aminul Haque told Prothom Alo that the construction of the project will be completely finished by December. Then after finishing the commissioning work, it will be possible to start the supply of fuel in full swing.
However, BPC director (operation and administration) Anupam Barua has stated that the transportation of oil through the pipeline will start by next March.
He told Prothom Alo that the commissioning of the project will be done in January. Then there will be staff recruitment and training activities. And, the transportation of oil will begin in March. Once this project has ended, it will save both money and time.