BPC seeks new crude sources amid Bab el-Mandeb risks

Bangladesh is seeking alternative sources of crude oil as rising security risks around the Bab el-Mandeb Strait are making shipments from the Middle East longer and more costly.

The Bangladesh Petroleum Corporation (BPC) has already started discussions with potential suppliers and hopes to import crude from a new source soon, its newly appointed chairman Md Rafiqul Islam said yesterday.

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“We have already spoken to representatives of an alternative source about importing crude oil. We are hopeful that we will be able to import crude from an alternative market very soon,” he told reporters at an exchange-of-views meeting at the BPC headquarters in Chattogram.

He said BPC began exploring alternative sources after the Middle East crisis escalated in March.

Following tests of crude from different countries, Eastern Refinery found oil from four countries -- Nigeria, Malaysia, Norway and Algeria -- compatible with its existing refining process.

The refinery tested Nigeria’s Bonny crude, Malaysia’s Malaysian Blend, Norway’s Alvheim Blend and Algerian crude and found that all four could be processed using its existing facilities.

Eastern Refinery submitted its findings to BPC in early April.

The state-owned refinery has the capacity to process around 1.4-1.5 million tonnes of crude oil a year. It currently processes Arabian Light crude from Saudi Arabia and Murban crude from the United Arab Emirates.

These two grades are used to produce 13 types of petroleum products, including diesel, bitumen and petrol.

Rafiqul Islam said there would be no fuel shortage until December, as the country has sufficient stocks and confirmed import orders.

The government has both short- and long-term plans to meet fuel demand, he said.

Meanwhile, BPC has almost finalised an LPG import deal following several rounds of tenders. The consignment is expected to arrive by the end of this month, the chairman said.

The move to diversify crude sources comes as security risks around the Bab el-Mandeb Strait are forcing Bangladesh-bound fuel vessels to take longer and costlier routes.

Bangladesh Shipping Corporation’s crude oil tanker MT Ninemia, carrying nearly 100,000 tonnes of crude, arrived at Chattogram port on Saturday after taking an alternative route through the Suez Canal, the Mediterranean, the Strait of Gibraltar and around the Cape of Good Hope.

The voyage took around 50 days and incurred an additional cost of Tk 66.63 crore.

A local official of the tanker told The Daily Star that the vessel could have reached Chattogram from Yanbu in around 13-15 days had it sailed through the Bab el-Mandeb and the Indian Ocean.