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Chittagong port city, at a cost of $110 million, by using naphtha, a
leading entrepreneur said on Sunday. 'With the technical assistance
of UOP of the USA and Exxon the plant will be able to produce up to
150,000 tonnes of high octane,' said Azam J Chowdhury, managing
director of Mobil Jamuna Fuels Limited. He told Reuters that MJFL
would use naphtha, a bi-product of the state-run Eastern Refinery
Limited, which exports 100,000 tonnes of naphtha to Singapore
annually. 'We offered ERL to pay more than the price fixed at per
barrel to benchmark spot quotes by price-reporting agency Platts, and
the government agreed to our proposal,' said Azam, also the chairman
of the East Coast Group, a leading oil trading house. Naphtha will
be the principal raw material for producing high octane, or octane 95.
Jamuna Oil Company, a state owned oil distributor, will hold 25 per
cent stake of the MJFL, while IFC, a subsidiary of the World Bank and
DG of Germany and FMO of the Netherlands will hold equal equity in the
plant. 'It will be able to produce octane in the middle of 2011,'
said Azam. He said that if the Bangladesh government did not
procure the octane from them they would export the whole product.
State-run ERL, which has the capacity to produce 1.5 million tonnes of
oil a year, is the only refinery in Bangladesh. Bangladesh imports
up to 3.8 million tonnes of oil a year, including 1.2 million tonnes
of crude oil to meet demand. Bangladesh consumes between 100,000
and 120,000 tonnes of octane. 'The naphtha-based plant will help
save nearly $51 million yearly,' a government official said. Azam
said the firm would also produce liquefied petroleum gas from the
plant by using the same raw materials. 'We will also set up a 5
megawatt power plant by using residual (product) of the plant to meet
our electricity requirements,' he said. Bangladesh imports oil
mainly from Saudi Arabia, Kuwait, United Arab Emirates, India and
Malaysia at a cost of between $2.5 and $3 billion.
