Dhaka: The government has embarked on a major initiative to modernize and expand Eastern Refinery Limited (ERL) to bolster the country’s energy security, enhance the production of environment-friendly fuels, and significantly reduce reliance on imported refined petroleum products. A project titled “Modernisation and Expansion of Eastern Refinery Limited (ERL)” has been launched by the Energy and Mineral Resources Division, with Eastern Refinery Limited executing it on behalf of Bangladesh Petroleum Corporation (BPC).
According to Bangladesh Sangbad Sangstha, the Executive Committee of the National Economic Council (ECNEC) approved the project during a meeting chaired by Chief Adviser Professor Dr. Muhammad Yunus at the NEC Conference Room in Sher-e-Bangla Nagar. The project, falling under the power and energy sector, will be implemented in the Patenga area of Chattogram City Corporation in Chattogram district.
The project’s estimated cost is Tk 35,465.15 crore, with Tk 21,277.59 crore sourced as a government loan and Tk 14,187.56 crore financed from ERL’s own resources. The implementation period spans from December 2025 to November 2030. Planning Commission officials highlighted the project’s key objectives, which include reinforcing national energy security, producing cleaner and environment-friendly petroleum products, and reducing the country’s heavy reliance on imported finished petroleum products.
The project will involve extensive activities such as site preparation, detailed engineering, procurement, and construction of both civil and mechanical works. A total of 20 processing units and 18 utility and off-site units will be installed. Electrical line connections will be sourced from the Power Development Board (PDB), while gas line connections will come from Karnaphuli Gas Distribution Company Limited (KGDCL). Additionally, drainage infrastructure will be constructed, and computers, office equipment, and other ancillary items will be procured.
Established in 1968, Eastern Refinery Limited currently processes 1.5 million metric tonnes of crude oil per year, meeting only about 20 percent of the country’s total petroleum product demand. The rest is fulfilled through imports, resulting in a substantial outflow of foreign currency. Planning Commission officials noted that the introduction of Euro-5 fuel standards has made petroleum specifications more stringent. The modernized refinery will produce Euro-5 standard environment-friendly gasoline and diesel and upgrade existing products to these standards.
Bangladesh Petroleum Corporation (BPC) has also implemented the “Installation of Single Point Mooring (SPM) with Double Pipeline” project, facilitating the transportation of up to 4.5 million metric tonnes of crude oil annually, thus creating favorable conditions for handling larger crude oil volumes required for the expanded refinery. BPC’s proposed modernization and expansion project aims to refine 3.0 million metric tonnes per year to meet growing petroleum product demand, reduce dependency on imported refined fuels, ensure energy security, and produce refined products at lower costs domestically.
The Planning Commission recommends that once implemented, the project will enable the country to refine 3 million metric tonnes of crude oil annually and meet around 45 to 50 percent of national petroleum product demand. This is expected to enhance fuel storage capacity, save foreign exchange significantly, and contribute to ensuring long-term energy security.