World Bank Document

Total Page:16

File Type:pdf, Size:1020Kb

World Bank Document DocDmntOf The WorldBank FOR OFFICIALUSE ONLY C A. /> Public Disclosure Authorized Report No. 6059-lD STAFF APPRAISAL REPORT Public Disclosure Authorized BANGLADESH REFINERY MODIFICATION AND LPG RECOVERYAND DISTRIBUTION PROJECT November 11, 1986 Public Disclosure Authorized Public Disclosure Authorized Energy Department Petroleum Projects, Division I This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Taka (Tk) US$1.00 = Tk 31.00 Tk 1.00 = US$0.0323 WEIGHTS AND MEASURES 1 barrel (bbl) 0.159 cubic meters (03) l cubic foot (CF) = 0.028 m I British Thermal Unit (Btu) - 0.252 kilocalories (Kc) I metric ton (mT) of oil 0.85 sp.gr. = 7.4 bbl I kilometer (km) - 0.621 miles MCF - thousand standard cubic feet MMCFD = million standard cubic feet per day BCF = billion cubic feet TCF - trillion (1,000 billion) cubic feet toe - tons of oil equivalent in heating value kgoe = kilogram of oil equivalent in heating value mw megawatt (1,000 kilowatts) MMtoe = million tons of oil equivalent ABBREVIATIONS AND ACRONYMS BOC Burmah Oil Company BOGMC Bangladesh Oil, Gas and Minerals Corporation BPC Bangladesh Petroleum Corporation BPDB Bangladesh Power Development Board CIDA Canadian International Development Agency CNG Compressed Natural Gas ERL Eastern Refinery Limited GOB Government of Bangladesh ICB International Competitive Bidding IDA International Development Associacion IFC International Finance Corporation IoC International Oil Company LNG Liquefied Natural Gas LPG Liquefied Petroleum Gas LP Gas LP Gas Limited LRMC Long-run Marginal Cost MHC Mild Hydrocracker NGL Natural Gas Liquid PIU Project Implementation Unit p.a. per annum UNDP United Nations Development Programme FISCAL YEAR July 1 to June 30 FOROMCIAL USE ONLY Bangladesh Refinery Modificationand LPG Recovery and DistributionPrr ^ct DevelopmentCredit and Project Summary Borrower: People's Republic of Bangladesh Beneficiaries: Eastern Refinery Limited (ERL) and LP Gas Limited (LP Gas), which are subsidiariesof BangladeshPetroleum Corporation (BPC), and BangladeshOil, Gas and Minerals Corporation (BOGMC), Amount: US$47.00 million Terms: Standard On-Lending Terms: The Governmentwould onlend at an interest rate of 11*5% per annum and on repayment terms of 15 years including4 years grace, US$35.5 million of the proceeds of the Credit to ERL for the refinery modificationcomponent; US$4.6 million to BOGMC for the LPG recovery component;and US$5.8 million to LP Gas Limited for the LPG storage and distributioncomponent. ERL, 9OGMC and LP Gas Limited would bear the foreign exchange risk. US$1.1 million will be applied to finance GOB'equity share in a privately- operated LPG distributioncompany to be establisbed. Projiect Description: The project provides assistanceto minimize the cost of petroleum imports to the country by rationalizingthe supply of petroleum products and promoting the substitute use of LPG for kerosene. To achieve these objectives,the project includes: (i) a modificationof the refinery to enhance its flexibilityto better match its productionto the domestic demand for petroleumproducts, thereby reducing the cost of meeting these requirements;and (ii) LPG recovery, storage,distribution and marketing facilitiesfor some 11,000 mTpa of LPG. Risks: The technical,financial and commercialrisks involved in each componentare minimal. The expected economic rate of return from the refinery modificationproject is 21%, based on a margin of $35 increasingto $40 per mT between diesel and fuel oil, a margin below the historicaland prevailing $45 to $50 per mT. At prevailingmargins, the ERR is about 40%. With regard to the LPG component,the LPG market is large and will displace mainly importedkerosene and firewood. The risks of the benefits being eroded to a level to make the project uneconomicare small, as foreign exchange savings are significantwhen LPG displaces kerosene. The non-quantifiablebenefits of reduced deforestationwhen LPG substitutesfor firewood would also be important. Thisdocument has a restricteddistribution and maybe usedby recipientsonly in the performanee of theirofficial duties. Its contentsmay not otherwise be disclosedwithout World Bank authorization. ii - Estimated Project Cost Povei Local a/ Total ----- US$ ilo - I. Refinery Modification (1) Refinery Moc.ificationand Operations Assistance 21.1 6.4 28.1 (2) Project Management Assistance 1.0 0.1 1.1 (3) Training and Technical Assistance 0.5 0.1 0.6 (4) Spare Parts 3.2 0.8 4.0 Sub-total 26.4 7.4 33.8 II. LPG Recovery FaCiliLies LPG Recovery Facilities at Kailashtila 3.5 0.7 4.2 Sub-total 305 0.7 4.2 III LPG Storage and Distribution (1) LPG Bottling Plants 0.6 0.2 0.8 (2) LPG Bottles 3.0 0.6 3.6 (3) LPG Transport (Trucks and Barges) 3.0 0.8 3.8 (4) LPG Retail Filling Units 0.2 0.2 0.4 (5) ImplementationAssistance/Training 0.5 0.2 0.7 (6) InfrastructureFacilities/Port/Land 103 1.3 2.6 Sub-total 8.6 3.3 11.9 Base Cost Estimate (Total.of I, II & III) 38.5 11.4 49.9 Physical Contingencies 3.9 1.1 5.0 Price Contingencies 10.1 3.8 13.9 Total Cost 52.5 16.3 68.8 Iaterest during Construction - 12.5 12.5 Total Financing Required 52.5 28.8 81.3 a/ Local costs include USS8.2 million of customs duties. - Lii - Fincin Plan Foreigl Local Totel (lS$ million)…-- IDA 4 59 1G1 47.0 Government of 8anggadeslh 19.5 19.5 Internal Cash Cene^atioin- 7.3 7.3 Private Investors 6.6 0.9 7.5 52.5 28.8 81.3 Estimated Disbursements (US$ million) (IDA Fiscal Year) 1987 1988 [989 1990 1991 1992 1993 Annual 5.5 ?.6 I il~o 3.6 1.8 0.3 Cumulative 5.5 13.1 30.3 41e3 44.9 46.7 47.0 Economic Rate of Return (i) Refinery Modification PLuject Component 21% (ii) LPG Early Recovery Priject Component (Kailashtila) 17% (iii) LPG Distribution Project Cowponeat (Westecn Zone) 15% BANGLADESH REFINERY MODIFICATIONAND LPC RECOVERY AND DISTRIBUTIONPROJECT Table of Contents Page No. IIs ITHE DENE ION SECTO........ ....... ... .0 *00000.000*OO S . II. THEEB.CROmmErCTI O.......... E.e...... .. ....... * .... ............... A. BetkgroundmProduts.Sbseco............... ..... , .2 B. Commercial Energy Asalanceoo ................ C.'ResourceEdwet.......... ¢&*o**X^v**¢***** D. Sector Planning**. .........Oe6z5 E. Petroleum Products Subsector *..........o.. .........#.9*. 5 1. Consumptionand Supply of Petroleum Products ..............5 2. PetroleumProducts Demand Forecast and Balance.o...... ,....6 3. Refinery Investment Strategy................ .6 F. LPG Consumption and Supply........... .*.... ... a7.0 G. Pricing.** ...0 ...... 8 1. Natural Gas ......... .......... ...... .8 2. PetroleumProducts.*. .. ....... ....to .......... 9 3. LPG9... ........ ...10 H. IDA's Role and Lending Strategy in the Petroleum Sector...... lO III. THE BENEFICIARIES............. **so** ..........ll ............... A. Bangladesh PetroleumCorporation (BPC) ........................ ll B. Eastern Refinery Limited (ERL)........................ *.12 C. LP Gas Limited ........0........ 12 D.OGM ......... o .** *...............................I E. Accounts and Audits ................. ...... 13 IV. THE PROJECT .................................. 14 AL.Project Objectivesand Scope.................................. 14 B. Project Rationale*.........&s........... so..........14 C. Project Description and Implementation..*........ ........oo 15 1. Refinery ModificationComponent..........................15 2. Early LPG Recovery,Storage and Distribution..*..........l7 D. Project Preparation Status ......... 000000000 000 0000000000000.18 E. Capital Cost Estimates...............0 l9 F. Financing Plan ..........e * Go Procurement ..e..**.***.o*... ......2 H. Disbursements ....... 0000000000000000000000000002 I. Monitoring and Reporting.** ..o009. ............. 23 J. Ecology and Safety.......*................. ..... 23 K. Insurance.. ............. This report is based on the findings of a mission that visited Bangladesh in October 1985 and was prepared by Messrs. L. Wijetilleke,J.P. Pinard, F. Manibog, P.T. Venugopaland A.C.W. Vonck. Page No. V, FINANCIAL ANALYSTS. .........................4 0f. .... .o...0 44.... 0.9.24 A. Refinery Modificationi Component:..... ................. o4o,..24 14 ERL's Past F'inancial Perfornmaice.... 9.o ....e *-...e 24 2, Remuneration of FRRL.OO.. - .............. 3. Financiat P.o..t..i.. *.....0* ... *e .25 B. Early LPG Recovery Comipoutentt (BoaCtr4C..t.................o..27 C. LPC Storage and i.sLributiOil Corioip*nt- (I'P Gas Limited) ..... 27 VI. ECONOMIC E.VAL.UATION e * 0e0 4.e**c* * *00 0 -..... 28 A. Introduction - Past Trt'nds. Dr 4 *......o .............. 9 ........ .o28 B. Crude Oil and rdndtuitPrice Asscumptions .... v....0........4 ,*29 C. Refinery Operations ................... ....... 1. Refinery ModificaLion Contponent..4 ....... ............. *30 2. RetiileryAs hk OO^.e ....... ....... eo*.ee #.Dev 4*e30.. D. LPG Recovery, Storage and Distribution e.e4. ............. 3 1. KailashtilaLPG Component- - ..... ............... 31 2. WesLernZofie LPC Campon2ent-- ...... , ............... o*#32 E. Project Risks0........... .9. 00. 4 0...... 0..........o.....32 1. Refinery Modification..... 0 ....... .. .. o 32 2. LPC Recovery, Stor.-geand nistribution ..........0... ... 32 VII. AGREEMENTS0...... 4....... 40.....0.400 .04.40........0.......0 0 33 ANNEXES 2-1 Sectoral Shares in Petroleum Products Consumption 2-2 Consumption of Petroleum Products, 1976-1984 2-3 Petroleum Products Demand Projections
Recommended publications
  • Feasibility Study of a Second Oil Refinery in Bangladesh
    FEASIBILITY STUDY OF A SECOND OIL REFINERY IN BANGLADESH PRODIP KUMER CHOWDHURY MASTER OF ENGINEERING IN PETROLEUM ENGINEERING DEPARTMENT OF PETROLEUM & MINERAL RESOURCES ENGINEERING BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY DHAKA-1000, BANGLADESH APRIL, 2010 FEASIBILITY STUDY OF A SECOND OIL REFINERY IN BANGLADESH A Thesis Submitted to the Department of Petroleum & Mineral Resources Engineering in partial fulfillment of the requirements for the Degree of MASTER OF ENGINEERING IN PETROLEUM ENGINEERING By PRODIP KUMER CHOWDHURY ROLL NO: 040313012 DEPARTMENT OF PETROLEUM & MINERAL RESOURCES ENGINEERING BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY DHAKA-1000, BANGLADESH APRIL, 2010 RECOMMRNDATION OF BOARD OF EXAMINERS The project titled "FEASIBILITY STUDY OF A SECOND OIL REFINERY IN BANGLADESH" submitted by Prodip Kumer Chowdhury, Roll No : 040313012, Session : April 2003, has been accepted as satisfactory in partial fulfillment of the requirements for the degree of MASTER OF ENGINEERING IN PETROLEUM ENGINEERING in April 24, 2010. Chairman(Supervisor) : _________________________________ Mohammad Shorab Hossain Assistant Professor Department of Petroleum & Mineral Resources Engineering BUET, Dhaka-1000. Member : _________________________________ Dr. Md. Mahbubur Rahman Assistant Professor Department of Petroleum & Mineral Resources Engineering BUET, Dhaka-1000. Member : _________________________________ Dr. Waliuzzaman Visiting Professor (Ex-chairman BCSIR ) Department of Chemical Engineering BUET, Dhaka-1000. Date: April 24,2010 ABSRACT Eastern Refinery Limited is the only Petroleum Refining Company in Bangladesh which was established in 1968. Its installed capacity is 1.5 million MT. But now it can hardly process 1.3 million MT due to its aging effect. Total annual demand of petroleum products in Bangladesh is about 4 million MT and it is increasing day by day.
    [Show full text]
  • Recommendation Report on Policy and Regulation Srgb
    Bangladesh Asian Development Bank C1334 – January 2012 RFP HCU/CS-06 Strengthening of the Hydrocarbon Unit in the Energy and Mineral Resources Division (Phase II) Petroleum Refining & Marketing (Package # 06) Recommendation report on Policy and Regulation in association with srgb Strengthening of Hydrocarbon Unit (Phase II) – Petroleum Refining & Marketing (Package # 06) Recommendation report on policy and regulation Table of Contents Abbreviations ........................................................................................................ 3 Policy Executive Summary................................................................................ 5 1. Introduction............................................................................................................ 8 1.1 Energy Background ............................................................................................................................................................8 1.2 Towards a New Policy........................................................................................................................................................9 2. Energy Resources............................................................................................... 11 2.1 Natural Gas.............................................................................................................................................................................. 11 2.2 Coal............................................................................................................................................................................................
    [Show full text]
  • Strategic Master Plan for Chittagong Port (Financed by the Japan Fund for Poverty Reduction)
    Technical Assistance Consultant’s Report Project Number: 45078 September 2015 People’s Republic of Bangladesh: Strategic Master Plan for Chittagong Port (Financed by the Japan Fund for Poverty Reduction) Prepared by: HPC Hamburg Port Consulting GmbH KS Consultants Limited, Dhaka, Bangladesh Sellhorn Ingenieurgesellschaft mbH, Hamburg, Germany For: Ministry of Shipping Chittagong Port Authority This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design. Asian Development Bank Chittagong Port Authority STRATEGIC MASTER PLAN FOR CHITTAGONG PORT Final Report, Part 1 Asian Development Bank Chittagong Port Authority STRATEGIC MASTER PLAN FOR CHITTAGONG PORT Final Report, Part 1 HPC Hamburg Port Consulting GmbH Container Terminal Altenwerder Am Ballinkai 1 21129 Hamburg Germany Phone: +49-40-74008-205 Fax: +49-40-74008-133 E-Mail: [email protected] Internet: http://www.hpc-hamburg.de In Technical Cooperation with KS Consultants Limited Sellhorn Ingenieurgesellschaft mbH House # B/173 (2nd Floor) Teilfeld 5 Road # 23, DOHS Mohakhali 20459 Hamburg Dhaka - 1206 Germany Bangladesh Phone: +49-40-361201-0 Phone: +88-02-8872512 Fax: +49-40-361201-28 Fax: +88-02-8812304 E-Mail: [email protected] E-Mail: [email protected] Internet: http://www.sellhorn-hamburg.de Copyright © by HPC 21/09/2015 21/09/2015 11:55 F:\PROJ\PPOS\26321_Bangladesh_Chittagong Masterplan\Reports\Final Report\Part 1\Final_Report_Part_1.docx Strategic Master Plan for Chittagong Port – Final Report, Part 1 iii TABLE OF CONTENTS Page EXECUTIVE SUMMARY 1 1.
    [Show full text]
  • Assessment Reports
    Bangladesh Asian Development Bank STRENGTHENING OF THE HYDROCARBON UNIT IN THE ENERGY AND MINERAL RESOURCES DIVISION (PHASE-II) PETROLEUM REFINING & MARKETING RFP HCU/CS-06 ASSESSMENT REPORTS December 2010 C1334 Société Française de Réalisation, d'Etudes et de Conseil 92-98, boulevard Victor Hugo 92115 Clichy Cedex - France Tél : +33 1 41 27 95 95 - Fax : +33 1 41 27 95 96 E-mail : [email protected] - Site Web : www.sofreco.com IN ASSOCIATION WITH srgb Centre For Research & Management Consulting SRG Bangladesh Limited Bangladesh Asian Development Bank STRENGTHENING OF THE HYDROCARBON UNIT IN THE ENERGY AND MINERAL RESOURCES DIVISION (PHASE-II) RFP HCU/CS-06 ASSESSMENT OF THE REFINERY December 2010 C 1334 Société Française de Réalisation, d'Etudes et de Conseil 92-98, boulevard Victor Hugo 92115 Clichy Cedex - France Tél : +33 1 41 27 95 95 - Fax : +33 1 41 27 95 96 E-mail : [email protected] - Site Web : www.sofreco.com In association with srgb Centre For Research & Management Consulting Refining and Marketing (Package 6) – Assessment of the Refinery TABLE OF CONTENTS EXECUTIVE SUMMARY ............................................... 7 CHAPTER 1: ERL ASSESSMENT OF CURRENT OPERATIONS ..11 1. INTRODUCTION ............................................................11 2. ASSESSMENT OF USED TECHNOLOGIES OF MAIN UNITS ...........13 2.1. General description .......................................................................13 2.2. Highlights and key assessment points..................................................14 2.3. Benchmarking ERL
    [Show full text]