Eastern Refinery Limited (ERL) is set to triple its crude oil processing capacity through a second-unit expansion project involving additional storage facilities, with a total cost of Tk35,465 crore.
The project is scheduled to be placed before the Executive Committee of the National Economic Council (Ecnec) at its meeting on Tuesday.
Established in 1968, the state-run company is the country’s oldest and largest petroleum refinery, with an annual refining capacity of 15 lakh tonnes of imported crude oil. It currently meets around 20% of national demand for petroleum products.
The proposed project will add a second processing unit alongside expanded storage capacity, significantly enhancing the refinery’s operational scale and contribution to national fuel security.
With the new unit proposed for another 30 lakh tonnes capacity, ERL will be able to cater for around half of the national demand for petroleum products after project accomplishment in November 2030.
Alongside strengthening national energy security by reducing dependence on imported refined petroleum products, the modern unit will enable the production of Euro-5 standard fuels, improving fuel quality and environmental performance.
Refining 30 lakh tonnes of crude oil annually, the new unit will be able to produce around 11 lakh tonnes of diesel, six lakh tonnes of gasoline, five lakh tonnes of jet fuel, 1.5 lakh tonnes of bitumen, 60,000 tonnes of liquefied petroleum gas, four lakh tonnes of furnace oil, two lakh tonnes of lube base oil and about 33,000 tonnes of Sulphur each year.
According to the Development Project Proposal, the planned technology, capable of refining cheaper heavy crude oil blended with pricier light crude, will save the country $18–20 per barrel.
Of the total cost, Tk21,277 crore will be financed by the government and Tk14,187 crore will be provided by ERL itself.
The project will be implemented at Eastern Refinery’s existing premises in Patenga under Chattogram City Corporation on 64.127 acres of long-term leased land, which is already connected to a pipeline network linking all petroleum marketing companies, enabling faster and lower-cost fuel distribution.
Meanwhile, Bangladesh has achieved a capacity to transport 45 lakh tonnes of crude oil to the ERL facilities through pipelines from the deep sea, where large vessels will unload crude oil at a floating terminal point.
The ERL second refinery will include 20 processing units and 18 utility and off-site units, along with storage facilities.
The project will follow a Turnkey Engineering, Procurement and Construction model, with a single contractor responsible from construction to commissioning and handover.
ERL earlier this year submitted its proposal for the project with a cost of over Tk40,000 crore. However, following the Planning Commission’s instructions, it cut the total cost and secured Project Evaluation Committee approval on 26 November.
