Single point mooring system finally gets operator

The country’s Tk 8,298 crore single point mooring (SPM) system has moved closer to regular operation after the government appointed an Indonesian operator, but its crude-oil pipeline could initially run at only about one-third of its designed annual capacity.

The government will pay nearly Tk 1,950 crore to Indonesian state-owned PT Pertamina Trans Kontinental to operate and maintain the facility for five years, according to a decision taken by the Cabinet Committee on Government Purchase yesterday.

Tap here to add The Daily Star as a trusted source

The appointment removes one of the main hurdles that has kept the completed facility largely idle for more than two years.

The SPM is an offshore oil-unloading system built in Maheshkhali to allow large tankers to pump crude oil and diesel directly into pipelines, instead of first transferring the fuel to smaller vessels at sea.

The single point mooring is an offshore oil-unloading system built in Maheshkhali to allow large tankers to pump crude oil and diesel directly into pipelines, instead of first transferring the fuel to smaller vessels at sea.

It has a floating buoy offshore and two separate pipelines, one for crude oil and another for diesel, which carry the fuels to storage tanks in Maheshkhali and eventually to Eastern Refinery and other facilities in Chattogram.

The system is expected to cut the unloading time for a large tanker from around 11 days to about 48 hours.

Pertamina’s base offer under the latest SPM tender was $128 million for five years. Including income tax and VAT, the total contract value is $159.135 million, equivalent to around Tk 1,946 crore at the exchange rate used in Bangladesh Petroleum Corporation’s (BPC) proposal.

The latest tender was BPC’s second attempt to appoint an operator.

In the previous tender, Pertamina was the only technically eligible bidder and quoted around $117 million for a 40-month contract, against BPC’s estimated base cost of about $88 million. After taxes and other applicable charges were included, the evaluated offer was around 51 percent above BPC’s estimate, according to BPC sources.

The tender was subsequently cancelled.

But while the appointment brings the SPM closer to operation, another constraint remains.

The crude pipeline is designed to handle around 4.5 million tonnes annually, while Bangladesh currently imports and refines only around 1.5 million tonnes of crude a year.

At the current level, therefore, crude would use only about one-third of the pipeline’s annual capacity.

The gap reflects the absence of Eastern Refinery’s long-delayed second unit, which is designed to add another 3 million tonnes of annual refining capacity and raise the refinery’s total capacity to around 4.5 million tonnes.

BPC Chairman Md Rafiqul Islam acknowledged the linkage when asked about utilisation of the SPM.

“The design was made keeping ERL-2 in mind,” he told The Daily Star.

ERL-2, however, is now targeted for completion only by November 2030. This means the SPM may enter regular operation years before Bangladesh has enough refining capacity to use its crude pipeline at the level originally envisaged.

Rafiqul said BPC will wait for the purchase committee’s formal resolution before issuing a notification of award and signing the contract with Pertamina.

“After we receive the resolution, we will issue the notification of award and then sign the contract with them,” he said.

Several contractual and procedural steps must still be completed before the Indonesian operator can be deployed at the site.

“There are some minimum contractual timelines -- seven days, then possibly another 28 days -- that we have to follow. There may also be some compliance requirements,” the BPC chairman said.

The SPM will not need to undergo another full round of trial operation, he said. However, some checks and reactivation work will be needed because the system has remained unused for a prolonged period.

The SPM was commissioned and trial runs were completed in March 2024, but regular commercial operation never began because an operator had not been appointed.

BPC estimated that the SPM could save around Tk 700-800 crore annually, mainly by eliminating the cost of lightering imported crude and diesel from large tankers to smaller vessels at sea and sharply reducing unloading time.

The delay has already imposed a substantial financial burden.

BPC repaid Tk 2,366 crore of the project loan in 2024 and another Tk 711 crore in 2025, taking total repayments to Tk 3,077 crore.

Another Tk 690 crore is due by December.

Meanwhile, the 18-month defect-liability period of China Petroleum Pipeline Engineering Company Ltd, which constructed the facility, expired on August 7 before regular commercial operation began.

ERL-2 STILL YEARS AWAY

The refinery expansion needed to fully utilise the crude side of the SPM has itself been delayed for more than a decade.

BPC began pursuing ERL-2 around 2010-12, but the project repeatedly stalled over financing and approval.

The previous Awami League government later moved to develop it through a joint venture with S Alam Group, but that plan was dropped after the political change in 2024.

Earlier this month, Bangladesh signed a $1 billion financing agreement with the Islamic Development Bank for the project, which is now estimated to cost around Tk 31,057 crore.

Rafiqul said a project director has already been appointed, a project office set up in Chattogram and 24 officials assigned to the project.

“BPC has also begun discussions with foreign technology licensors,” he said.