Bangladesh signing $554 million credit deal with China for single point mooring

Bangladesh is penning a $554 million loan deal with China to build a deep-sea single point mooring with an aim to cut the time and cost of offloading fuel oil from tankers.

The Economic Relations Division or ERD and the Export-Import Bank of China will sign the deal in Dhaka on Sunday.

ERD Deputy Secretary AKM Matiur Rahman told bdnews24.com that the project titled 'Installation of Single Point Mooring With Double Pipeline' is part of memorandums of understanding or MoUs signed for 27 projects with a total estimated cost of $24 billion during Chinese President Xi Jinping's Dhaka visit last year.

>> China will give Bangladesh $82.5 million in soft loan and the remaining $467.8 million in preferential buyers' credit. 

>> With a grace period of five years, Bangladesh will get 30 years to repay the loan with 2.25 percent interest.

>> The government expects to save around Tk 8 billion annually once the mooring is built.

Matiur said the mooring would play a key role in reducing time and cost of offloading imported fuel oil by bringing order to the work.

State-owned Bangladesh Petrolium Corporation's Eastern Refinery is the sole fuel oil refinery of the country now. It can refine 1.5 million tonnes crude oil annually.

Bangladesh imports around 3.5 tonnes diesel a year to meet the domestic demand.  

Matiur said Bangladesh cannot offload imported fuel oil at the Eastern Refinery depot directly.

The oil tankers anchor at deep sea and lighter vessels take the oil to the depot as the port is not navigable for the tankers.

"It takes three to seven days to offload oil from tankers in this way and the government has to pay the shipping companies fines for the extra period," Matiur said.

According to him, it will be possible to offload 120,000 tonnes crude oil in 48 hours and 70,000 tonnes diesel through the proposed mooring with its two pipelines.

The mooring's capacity to offload oil annually will be 9 million tonnes.

The deputy secretary said the plan is to send the oil directly to the refinery depot through the mooring.

The Executive Committee of National Economic Council or ECNEC cleared a project to set up a single point mooring with double pipeline at the deep sea in 2010, a lack of fund meant the project could not go ahead.

It, however, gained pace after the signing of the related MoU during Xi's visit.

The BPC then signed a deal with China Petroleum Bureau on Dec 8 to implement the project.

According to the deal, the Chinese bureau will build the mooring in Maheshkhali and set up a 220-kilometre double pipeline to the refinery depot.

Storage tank and pump station will also be set up in Maheshkhali.