ECNEC approves ERL's refinery modernization and expansion project
The Executive Committee of the National Economic Council (ECNEC) approved the modernization and expansion of Eastern Refinery Limited (ERL-2) project, with a total cost of Tk35,465.15 crore, to reduce Bangladesh’s dependence on imported refined petroleum products.
Once completed, the project will raise domestic crude oil refining capacity to 45 lakh tons per year, significantly cutting imports of refined fuels. As development partners did not provide financing, the government decided to implement the project with public funds. Of the total cost, Tk21,277.59 crore will come from government funding, while Tk14,187.56 crore will be financed by Eastern Refinery Limited.
The new refinery unit will be capable of processing crude oil from a wide range of sources, including the Middle East, Europe and Africa, reducing reliance on Middle Eastern supplies. Its design is based on Arabian Light and Murban crudes, but it will also be able to refine Russian Urals, Nigeria’s Brass River, and other heavy crudes through flexible processing and crude-blending facilities.
The ERL-2 initiative has faced repeated delays since first being proposed in 2010 due to financing, bureaucratic and implementation challenges. After failed attempts involving revised budgets, self-financing by Bangladesh Petroleum Corporation, and private sector interest, the interim government revived the project and approved a reduced budget following scrutiny by the Planning Commission.
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