Sunday, 19 September, 2021

Govt may import condensate for private refineries

  • Special Correspondent
  • 1 September, 2021 12:00 AM
  • Print news
Govt may import condensate for private refineries

Popular News

The government is likely to import condensate, a byproduct of natural gas, to feed 12 private refineries for producing 1.3 million tonnes of petroleum fuel annually.

The ministry of power, energy and mineral resources has discussed the matter with private condensate refineries last Thursday.

“Bangladesh Petroleum Corporation (BPC) will import condensate for private refineries subject to the approval of the prime minister,” State Minister for Power and Energy Nasrul Hamid told the Daily Sun on Tuesday.

He said the ministry will send a summary to Prime Minister Sheikh Hasina in this regard.  The private refineries must supply the petroleum products as per the guideline of BPC, he added.

The private refinery plants have remained closed due to a supply shortage of condensate from local gas fields. Besides, there is a High Court verdict issued to ensure the production and use of environment-friendly petroleum products.

The HC verdict against harmful petroleum products came in January last year. Six months later, the production of condensate dropped at the local gas fields, prompting the authority to stop supplying condensate to 12 refineries for producing downgraded fuel oil.

The imported condensate will contain a high level of diesel and the refiners will only be allowed to produce diesel after more than a year of suspension in production.

If they produce other gasoline products, they will have to maintain the standards set by the Bangladesh Standards and Testing Institution (BSTI).

An observatory committee has been formed to oversee the imports of condensate for supply to the private refineries.

“We have invested around Tk 30 billion over the years to reduce import dependency on petroleum fuels. We thank the prime minister for her confidence in private sector investment in refineries,” Petrochemical and Refiners Association of Bangladesh (PRAB) President Md Mamun Salman told the Daily Sun.  He said the private refineries will be able to refine 1.3 million tonnes of petroleum fuel annually.

He also alleged that a syndicate had hatched conspiracies against investment in their sector which is employing more than 5,000 people.

Irshad Hossain, former present of PRAB, said they will refine products from imported diesel-rich condensate. The condensate will be more environment-friendly and the government will be able to meet a major portion of diesel demand from the supplies from private refineries.       

As per the specifications set by the BSTI, refineries are supposed to produce petrol with 89 research octane numbers (RON). RON is a measurement of the performance of gasoline. The higher the number is the greater resistance gasoline shows to early ignition.

Before the condensate supply suspension, the privately-owned plants could produce gasoline of 80 RON.

The quality of petrol in the neighbouring countries is much better than in Bangladesh. India has set RON 91, Pakistan RON 92, Sri Lanka RON 92 and Myanmar RON 92 for domestic consumption.

Around 10,000 barrels of condensate is produced daily at the country's gas fields as a byproduct and goes to three private and two state-owned refineries.

The amount is not sufficient even for these five refineries.

Against this backdrop, the Petrochemical and Refiners Association appealed to the energy division to import diesel-rich condensate so that the closed plants could resume operation. 

The Energy and Mineral Division then asked for Bangladesh Petroleum Corporation's (BPC) opinion regarding the scope of import and storage capacity.

As per the BPC Act -2016, the corporation is the lone state-owned company authorised to import refined and crude oil to meet the country's energy demand.

With all of its facilities, the BPC now has a storage capacity of around 1.3 million tonnes of petroleum.

However, three oil marketing companies of the BPC refused to keep condensate at their facilities as they use the infrastructure only to store refined oil.

Only Eastern Refinery Limited and Standard Asiatic Oil Company Limited agreed to store diesel-rich condensate in their 20,000-tonne storage capacity.

It will take three to four more months to prepare the facilities to store imported fuel products.

“Our refineries will require 60,000-70,000 tonnes of imported condensate to run in full capacity,” the PRAB president said.