Moheshkhali-Patenga oil pipeline transportation on 29 Feb

The much-anticipated oil transportation through Single Point Mooring – a pipeline facility to pump imported petroleum products from the deep sea to the storage at Moheshkhali and the Eastern Refinery at Patenga in Chattogram – is all set to go into full operation on 29 February, marking a significant milestone in Bangladesh's energy infrastructure.

This historic endeavour under the "Installation of Single Point Mooring (SPM) with Double Pipeline" project promises substantial savings and efficiency gains in oil clearance operations.

Initially beset by mechanical issues, the project has now overcome its teething problems with successful experimental discharges of crude oil and diesel from offshore vessels. These fuels will now be pumped to the Patenga Eastern Refinery, marking the culmination of efforts that began four months ago.

Confirming the schedule, the Eastern Refinery Managing Director Md Lokman told The Business Standard that the pipeline from the deep sea to the reservoir in Moheshkhali was launched earlier.

"February 29 has been scheduled to launch the pumping of the oil reserved in the tanks at Moheshkhali through the offshore pipeline to Patenga," he added.

"It has been scheduled twice earlier. Due to technical reasons, the operation could not be started. If everything remains alright, we hope to launch the operation this time," Engineer Lokman said.

Replying to a quarry, he said the pipeline has the capacity to pump 90 cubic metres of oil per hour. 

The ambitious project aims to facilitate the seamless transfer of fuel oil from vessels anchored in the deep Bay of Bengal directly to the Eastern Refinery, bypassing the need for traditional lighterage methods.

At the heart of this initiative lies the construction of a "single point mooring" near Kutubdia and the laying of a 220km double pipeline, comprising 146km offshore and 74km onshore sections.

As part of the project, alongside the installation of the pipeline, storage tanks for 125,000 tonnes of crude oil and around 80,000 tonnes of diesel were constructed in Maheshkhali.

These tanks serve as strategic reserves for imported crude oil and diesel, facilitating efficient distribution as per demand. From these storage facilities, crude oil is directed to the Eastern Refinery via one pipeline, while diesel is routed to the main depots of Padma Oil Company, Jamuna Oil Company, and Meghna Petroleum in Guptakhal, Patenga, via another pipeline.

China Petroleum Pipeline and Engineering, under the supervision of a specialist organisation in Germany, is spearheading the execution of this project.

Previous attempts in July last year to release fuel oil from the deep sea were thwarted by technical glitches, including issues with the pipeline. However, following rectification measures, on 1 December, a shipment of 82,000 tonnes of crude oil from Saudi Arabia was successfully unloaded at the floating jetty (SPM buoy) in the Bay of Bengal. Subsequently, an additional 60,000 tonnes of diesel were discharged from another vessel.

Despite the successful unloading, complications in the pipeline hindered the transportation of both crude oil and diesel to the Eastern Refinery. These challenges have since been addressed, paving the way for the imminent commencement of fuel oil transportation through the pipeline network.

The state-owned corporation, which is responsible for importing liquid fuel and supplying energy across the country through its distribution units, imports around 63 lakh tonnes of fuel in refined and crude forms.

At present, it takes 10-11 days to release one lakh tonnes of oil from the deep sea through small lighterage vessels.

In order to save both time and money in unloading crude and refined petroleum products, the government took up the project in 2015 at a cost of Tk4,935 crore with a deadline of December 2018.

It is expected that the SPM pipeline will take only two to three days to discharge the oil. Then there will be no need to operate lighterage vessels, which will save transportation costs.

The project is anticipated to result in savings of around Tk800 crore annually in freight costs.

But with multiple time extensions and missed deadlines, the project has already seen a cost escalation of 44.37% to Tk7,125 crore. And another 15.39% cost escalation has been tabled and is now under consideration.