Pvt refineries to get condensate on condition of clean energy

The government is likely to import condensate, a mixture of light liquid hydrocarbons found as a byproduct of gas, to help resume the operations of 12 private plants that separate the liquid into individual products, such as diesel, petrol and octane.   

The plants have remained closed due to a supply shortage of condensate from local gas fields and a High Court order on ensuring environment-friendly petroleum products. 

The imported condensate will contain a high-level of diesel and the refiners will only be allowed to produce diesel after more than a year of production suspension. If they produce other gasoline, they will have to maintain the standards set by the Bangladesh Standards and Testing Institution. 

"We are thinking of supplying the raw materials to the plants through imports, considering investments in the sector," said Md Anisur Rahman, senior secretary of the Energy and Mineral Resources Division. 

An observatory committee has been formed to oversee the imports of condensate for supply to the private refineries. 

A total of 15 private petroleum refineries have invested around Tk2,000 crore over the years, employing more than 5,000 people, said a source at the Petrochemical and Refiners Association of Bangladesh. 

The HC verdict against harmful petroleum products came in January last year. Six months later, the production of condensate dropped at the local gas fields, prompting the authority to stop supplying condensate to 12 refineries "for producing downgraded fuel oil". 

As per the specifications set by the BSTI, refineries are supposed to produce petrol with 89 research octane numbers (RON). RON is a measurement of performance of gasoline. The higher the number is the greater resistance gasoline shows to early ignition. 

Before the condensate supply suspension, the privately-owned plants could produce gasoline of 80 RON. 

The quality of petrol in the neighboring countries is much better than in Bangladesh. India has set RON 91, Pakistan RON 92, Sri Lanka RON 92 and Myanmar RON 92 for domestic consumption. 

Around 10,000 barrels of condensate is produced daily at the country's gas fields as a byproduct and goes to three private and two state-owned refineries.

The amount is not sufficient even for these five refineries. 

Against this backdrop, the Petrochemical and Refiners Association appealed to the energy division to import diesel-rich condensate so that the closed plants could resume operation.  

The Energy and Mineral Division then asked for Bangladesh Petroleum Corporation's (BPC) opinion regarding the scope of import and storage capacity. 

Storage capacity of imported petroleum

As per the BPC Act -2016, the corporation is the lone state-owned company authorised to import refined and crude oil to meet the country's energy demand. 

With all of its facilities, the BPC now has a storage capacity of around 13 lakh tonnes of petroleum. 

However, three oil marketing companies of the BPC refused to keep condensate at their facilities as they use the infrastructure only to store refined oil. 

Only Eastern Refinery Limited and Standard Asiatic Oil Company Limited agreed to store diesel-rich condensate, with 20,000-tonne storage capacity. 

It will take three to four more months to prepare the facilities to store imported products. 

Syed Mehdi Hasan, director (operations & planning) of the BPC, told The Business Standard that the corporation had informed the ministry of how much condensate it could store and the scope of import. 

"If the ministry asked us to import condensate, we will surely do the job as we are importing other fuel oil," he added.