Govt initiates Tk 35,465.14cr big move to modernize ERL
The government has initiated a big move to modernise and expand Eastern Refinery Limited (ERL) with a view to strengthening the country's energy security, producing more environment-friendly fuels and significantly reducing dependence on imported refined petroleum products.
In this regard, a project titled "Modernisation and Expansion of Eastern Refinery Limited (ERL)" has been undertaken by the Energy and Mineral Resources Division, while Eastern Refinery Limited will implement it on behalf of Bangladesh Petroleum Corporation (BPC).
The Executive Committee of the National Economic Council (ECNEC) gave approval to the project in its meeting today with Chief Adviser Professor Dr Muhammad Yunus in the chair held at NEC Conference Room in the city's Sher-e-Bangla Nagar area.
The project falls under the power and energy sector and will be implemented in Patenga area under Chattogram City Corporation in Chattogram district.
The estimated cost of the project is Tk 35,465.15 crore, of which Tk 21,277.59 crore will come as government loan, while Tk 14,187.56 crore will be financed from ERL's own resources. The implementation period has been set from December 2025 to November 2030.
Planning Commission officials said the key objectives of the project are to further reinforce national energy security, produce cleaner and more environment-friendly petroleum products and reduce the country's heavy reliance on imported finished petroleum products.
Under the project, a wide range of activities will be carried out, including site preparation, detailed engineering, procurement and construction involving both civil and mechanical works.
A total of 20 processing units and 18 utility and off-site units will be installed as part of the expansion.
In addition, electrical line connections will be taken from the Power Development Board (PDB), gas line connections from Karnaphuli Gas Distribution Company Limited (KGDCL), drainage infrastructure will be constructed, and computers, office equipment and other ancillary items will be procured.
Eastern Refinery Limited, established in 1968, currently has a crude oil processing capacity of 1.5 million metric tonnes per year. At present, ERL meets only about 20 per cent of the country's total demand for petroleum products, with the remaining requirement being fulfilled through imports.
This results in a substantial outflow of foreign currency for importing refined fuels.
Planning Commission officials noted that the introduction of Euro-5 fuel standards has made petroleum product specifications much more stringent. The proposed modernised refinery will produce Euro-5 standard environment-friendly gasoline and diesel, while upgrading existing diesel, motor spirit and octane produced at ERL to Euro-5 standards.
In the meantime, BPC has already implemented the "Installation of Single Point Mooring (SPM) with Double Pipeline" project, which will enable transportation of up to 4.5 million metric tonnes of crude oil annually. This development has created favourable conditions for handling larger volumes of crude oil required for the expanded refinery.
In this context, BPC has proposed the modernisation and expansion project with a refining capacity of 3.0 million metric tonnes per year to meet the country's growing demand for petroleum products, reduce dependence on imported refined fuels, ensure greater energy security and produce refined petroleum products at comparatively lower cost by processing crude oil domestically.
The Planning Commission, in its recommendation, said that once implemented, the project would enable the country to refine 3 million metric tonnes of crude oil annually and meet around 45 to 50 per cent of national demand for petroleum products.
This is expected to enhance fuel storage capacity, save a significant amount of foreign exchange and contribute to ensuring long-term energy security for the country.