The operational cost of Bangladesh’s maiden Tk 80 billion single-point mooring (SPM) project is set to exceed initial estimates as moves are underway to appoint a foreign contractor to manage both its onshore and offshore operations, officials say.

The Bangladesh Petroleum Corporation (BPC) had planned to run the onshore portion itself to curb costs, leveraging its experience in operating 126 km of the Bangladesh-India Friendship Pipeline and preparing to launch the 250 km Dhaka–Chattogram pipeline next week.

A new entity, Petroleum Transmission Company PLC (PTCP), was also formed to manage oil pipelines and keep fuel prices stable.

Officials argue that while a foreign firm may be needed for the 120 km offshore section, the 100 km onshore portion could be handled by BPC to save money. Six storage tanks with a combined capacity of 240,000 tonnes have already been built onshore.

The SPM, constructed by China Petroleum Pipeline Engineering Co Ltd at a cost 60% higher than first projected, was handed over in August 2024 but has remained idle for a year. Delays in appointing an operator have forced BPC to continue using lighter vessels, incurring additional expenses of $5.50 per tonne.

Funded largely by Chinese loans, the SPM is designed to unload petroleum from 100,000-deadweight tonnage tankers in 48 hours, compared with the current 11 days, saving Tk 8 billion annually in transport costs once operational.

The project was built under the now-repealed Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010.