From deep sea to refinery: Bangladesh enters oil piping era

• The pipelines will replace lighter vessels, cut time and costs
• The trial started 7 days after the MT Horae with 82,000 tonnes of crude oil reached the Bay
• The project to help increase oil reserving capacity, better tackling impacts of global volatility

Bangladesh has entered a new era of imported oil transportation from the deep sea to refinery through pipelines with a test run of under construction Single Point Mooring project in Cox's Bazar Moheshkhali on Sunday.

The trial started seven days after a large ship from Saudi Arabia, named "MT Horae", reached the Bay of Bengal, carrying some 82,000 tonnes of crude oil, officials said. 

"The oil tanker anchored in deep sea near Maheshkhali on 25 June. The trial was supposed to be done on the next day, but it was postponed due to adverse weather conditions. The trial and commissioning have finally kicked off today [Sunday] afternoon," Engineer Md Sharif Hasnat, director of the Single Point Mooring project, told The Business Standard.

Bangladesh is used to using lighter vessels to transfer imported crude oil from mother vessels to refineries, which usually takes almost 12 days and costs extra money in freight charges. "With the pipeline arrangements, the time can be brought down to only three days, and costs can be cut substantially," added Sharif Hasnat.

A total of 220km of pipelines – 146km offshore and 74 km onshore – have been installed under the project. The offshore pipelines will carry the petroleum oil from the mother vessel to a shore tank set up in the Kalamarchara area of Moheshkhali. The onshore pipelines will later carry it to the state-run Eastern Refinery in Chattogram's Patenga.

The Tk8,341-crore Single Point Mooring project is expected to save around Tk800 crore annually by cutting time and costs in imported oil transportation. If the test run is successful, Prime Minister Sheikh Hasina will inaugurate the project in August, said Sharif Hasnat.

"The MT Horea is the largest ship in the history of Bangladesh. The ship's 82,000 tonnes of crude oil is piped from the deep sea to Patenga. It has never happened in the country before," added Rear Admiral M Sohail, chairman of the Chatttogram Port Authority, which cooperates with the authorities of the Single Point Mooring project – Bangladesh Petroleum Corporation – in the test run. 

He told TBS that the project would bring a great change in imported petroleum product transportation and distribution.

Lawmaker from the Cox's Bazar-2 constituency Ashek Ullah Rafiq lauded the government's move and said the project will also help the government increase its fuel oil reserves and better manage supply chains during global volatility.

Out of the six tanks installed at Kalamarchara, three are used for reserving oils, he added. 

The Bangladesh Petroleum Corporation says the country currently has an oil reserve capacity for two and a quarter months. With the launch of the Single Point Mooring project, the capacity will be increased by another 15 days, thanks to onshore reserve tanks and pipelines' storage capacity –  20,000 tonnes.

According to the Energy and Mineral Resources Division, the state-run Eastern Refinery can refine 15 lakh tonnes of crude oil per year. The project will help boost its capacity to 45 lakh tonnes. 

"The Single Point Mooring has great importance for various reasons. One is that it will help increase the fuel reserve capacity of the country, which can benefit us during global crises," said Abu Morshed Chowdhury Khoka, president of the Cox's Bazar Chamber of Commerce and Industry. 

Besides, it will cut time and costs in imported oil transportation, he told TBS.

The Single Point Mooring project, commenced in 2015, was scheduled to be completed on 30 June. As the authorities failed to complete works on time and some changes were made, it got another one-year extension, with the estimated costs raised by Tk1,217 crore to Tk8,341 crore. It was Tk5,500 crore initially.

The lion's share of the finance is coming from the Exim Bank of China, while the government and the Bangladesh Petroleum Corporation are covering the rest. China Petroleum Pipeline Engineering Company Limited is working as the engineering, procurement, and construction contractor, while Germany-based ILF Consulting Engineers has been providing technical support.