Dhaka, Bangladesh (BBN)- The Iranian government has expressed interest to finance the Eastern Refinery Limited (ERL) for upgrading its crude oil refinery capacity three folds, officials said.
The Iran government in a recent letter said it is interested to finance modernization project of the highly profitable ERL as Bangladesh needs to boost its oil refining capacity to meet growing fuel demand.
"The Iranian government has sought some documents like feasibility study, technical and market evaluation reports for evaluating commercial viability of the project," a senior economic relations division (ERD) official was quoted by the Financial Express (FE), a local newspaper, as saying.
The age-old ERL, the lone state-owned petroleum refinery under the Bangladesh Petroleum Corporation (BPC), has the capacity to refine 1.5 million tons of fuel oil only, although the country has now demand for over 3.8 million tons of oil per year.
The BPC looks forward to meeting the growing fuel and petroleum products' demand in the country that will increase to 6.6 million tons by 2015, a BPC official said.
Based on the feasibility study by a Pakistani firm, the state-owned fuel oil refinery has undertaken a BDT 65.77 billion ($940 million) ERL renovation project in a bid to raise the crude refining capacity.
Due to shortage of funds, the ERL has already invited local and foreign investments for the refinery upgradation scheme through newspaper advertisements.
The state-owned oil refinery has invited investments in formats like build-own-operate-transfer (BOOT), public-private partnership (PPP), finance-only or any other suitable option.
The upgraded ERL would save the country from import of about 2.5 million tons of costly refined oil to meet its present annual demand of 3.8 million tons, according to the reports.
BBN/SSR/AD-21Aug10-12:56 pm (BST)
