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DHAKA (Reuters) - Bangladesh and Saudi Arabia on Saturday has signed a deal to invest $3 billion to set up an oil refinery with a capacity to produce 300,000 barrels of oil products a day.
Hi-Tech International Group (HTIG) of Saudi Arabia and Cosmopolitan Oil Refinery Management Limited (CPORML) of Bangladesh signed the deal to implement the project within the next 40 months, chairman of CPORML said.
"If everything goes well, we will be able to go for production on time," Dewan Sultan Ahmed, chairman of the CPORML told reporters after signing the deal.
The plant will be set-up with 100 percent foreign direct investment and it will import more than 5 million tonnes of crude oil from Saudi Arabia, Sultan said. The entire final product will be exported in neighboring counties, he added.
The production capacity of the proposed refinery will be more than three times of the state-run Bangladesh Eastern Refinery Limited (BERL), the lone refinery plant in the country, Sultan said.
BERL, located at the port city of Chittagong with 1.5 million tonnes of refinery capacity of crude oil, supplies refined oil to three state-owned oil firms for distribution across the country.
The plant will use most modern fractional distillation and hydrocarbon cracking technology to refine the crude, he said.
"We are committed to ensure the plant as environmentally friendly," Sultan said.
Yasin S. Indarki, chairman of the HTIG said in the deal signing meeting that as the sponsor of the project they would be able to implement the project with assistance from Bangladeshi partner.
"It is a happy day for us as we are joining in development activities in Bangladesh, one of the biggest Islamic and our best brotherly countries in the world," Yasin said.
Bangladesh imports 3.8 million tonnes of fuel every year, including about 1.5 million tonnes of crude oil, officials said.
In Bangladesh, the price difference between refined and crude oil is up to $10 per barrel, they said.
Reporting by Serajul Islam Quadir; Editing by Ron Askew