The New Nation - Internet Edition

Staff Reporter

A Saudi business group yesterday signed an agreement with a local business house to invest US 3 billion dollars (Tk 20,700 crore) to set up an oil refinery in Bangladesh with a capacity to produce 300,000 barrels per day, top officials of the two companies said.

Yasin S Indarki, Chairman of Hi-Tech International Group (HTIG) of Saudi Arabia and Dewan Sultan Ahmed, Chairman of Cosmopolitan Oil Refinery Management Limited (CPORML) of Bangladesh signed the deal at a ceremony at a city hotel.

The 100 per cent foreign direct investment project will be completed within 40 months with more than three times higher production capacity than that of the state-run Bangladesh Eastern Refinery Limited (BERL), the lone refinery in the country.

The proposed new refinery will import more than 5 million tonnes of crude oil from Saudi Arabia per year against the 1.5 million tonnes of refinery capacity of BERL, which is located in the port city of Chittagong.

Official sources said the country imports 3.8 million tonnes of fuel, including about 1.5 million tonnes of crude oil every year. The price difference between refined and crude oil is up to US 10 dollar per barrel in the country.

While the BERL supplies refined oil to three state-owned oil firms-Jamuna, Padma, Meghna-for distribution across the country, the proposed new project would export its entire finished product in the neighbouring counties.

After signing the agreement, CPORML Chairman Dewan Sultan Ahmed told journalists that the new refinery would be able to go for production on time (after 40 months) if everything goes well.

The plant will use most modern fractional distillation and hydrocarbon cracking technology to refine the crude, he said.

"We are committed to ensure the plant as environmentally friendly," Sultan said.

Yasin S Indarki, Chairman of the HTIG said at the deal signing ceremony that as the sponsor of the project they would be able to implement the project with assistance from Bangladeshi partner.

He said, "It is a happy day for us as we are joining in development activities in Bangladesh, one of the biggest Islamic and our best brotherly countries in the world."