Single Point Mooring to miss completion goal yet again

The Single Point Mooring with Double Pipeline project – launched in 2015 to facilitate unloading of imported fuel oil more efficiently from ships anchored in the deep sea – will miss its completion goal for the third time.

As the government could not implement the SPM project in time due to the Covid-19 crisis, its deadline was increased by a year from June 2022 to June 2023, and costs rose by Tk 556 crore, sources from the Planning Commission’s Oil, Gas and Natural Resources Wing said.

Speaking with The Business Post, Bangladesh Petroleum Corporation’s Director (Operations and Planning) Syed Mehedi Hasan said, “Though the deadline has increased by a year, we will make a sincere effort to complete the project by 2022, so that it can become operational a bit sooner.

“This project, when implemented, will allow faster unloading of imported fuel oil from ships, and save the country around Tk 800 crore annually. Presently, it takes around 11 days to unload oil from mother vessels, but the SPM will allow us to do the same in 48 hours.”

As of June 2021, Tk 3,388 crore has been spent on the project, which is 51.58 per cent of the fund.

Project implementation reached 63 per cent during the same period, energy division sources say.

According to the BPC, the government had set Tk 4,936 crore as the initial cost for the “Installation of Single Point Mooring (SPM) with Double Pipeline” in 2015. The cost has now reached Tk 7,124.39 crore after three revisions.

Initially, the project was supposed to be completed in 2018, but the completion deadline was shifted to June 2022 and then June 2023 in the second and third revisions respectively.

When completed, the SPM project will boost Bangladesh’s oil holding capacity too.

A faster, safer unloading system

Bangladesh imported around 52 lakh tonnes of fuel oil in the Fiscal Year 2020-21. The country is not capable of unloading oil directly from mother oil tankers because of Chittagong port’s infrastructure limitations and Karnaphuli River’s low navigability.

So, these tankers anchor in the deep sea and small lighterage vessels transport the imported oil to the Eastern refinery. Using this method, it takes around 11 days to unload oil from a vessel that has a capacity of one lakh DWT (deadweight tonnage).

BPC sources said the current method is time-consuming, risky, and expensive. So, the government undertook the “Installation of Single Point Mooring (SPM) with Double Pipeline” project to make the process more efficient.

SPM will allow Bangladesh to unload oil from a tanker with a 1.2 lakh DWT capacity in just 48 hours, while it will take 24 hours with a 70,000 DWT capacity vessel.

The mooring point is located in the south-west deep sea, nine kilometres away from the Matarbari area of Moheshkhali.

After the project’s completion, when a mother vessel arrives at the mooring point, oil will be pumped through the pipeline to Moheshkhali’s Kalaramchhara storage tank. From there, the oil will again be pumped to the Eastern refinery.

For this purpose, the authorities concerned are building six storage tanks in the 90-acre project area in Kalaramchhara with loans from China’s Exim Bank. Three of the tanks will be used for storing crude oil, while three others will be used for refined oil.

Each refined oil storage tank will have a capacity of 60,000 cubic metres, while each crude oil tank will have a capacity of 36,000 cubic metres.

Project sources said the offshore pipeline will stretch for 146 kilometres, while the onshore pipeline will be 74 kilometres in length. Two separate pipelines – with the diameter of 36 inches – will allow the unloading of both crude oil and diesel simultaneously.

From the Moheshkhali storage tank, two pipelines with the diameter of 18 inches will carry crude oil and diesel to the refinery.

The Eastern Refinery – Bangladesh’s only such facility – can refine 15 lakh tonnes of crude oil annually. The government has plans to build another unit at the facility and upgrade its refining capacity to 45 lakh tonnes.

Sources from the Planning Commission’s Oil, Gas and Natural Resources Wing said the latest increase of Tk 556.12 crore in project costs is 44.37 per cent of the initial cost. Besides, the costs rose by Tk 129.04 crore due to customs duty, VAT-AIT and bank charges.