The price formula for diesel imported from India via pipeline is to be negotiated by a four-member team from Bangladesh scheduled to visit the neighbouring country in December.
The Indo-Bangla Friendship Pipeline will allow very large scale diesel imports from India when it comes on line, with plans to import up to 1 million metric tonnes per year.
The pipeline will be implemented through a joint venture of the state-run Bangladesh Petroleum Corporation (BPC) and Numaligarh Refinery Ltd (NRL), a subsidiary of India’s state-run Bharat Petroleum Corporation Ltd.
A team comprised of three BPC officials and an official of the Energy Division will hold talks to finalise construction plans and the formulation of a joint venture company for the pipeline.
“The BPC will import 1 million metric tonnes per annum of diesel from the NRL. We hope to finalise a work plan to construct the pipeline, discuss the formulation of the joint-venture company and finalise the deal,” Mosleh Uddin, BPC director for operations and planning, told the Dhaka Tribune yesterday.
“Initially, 200,000 metric tonnes of fuel will be imported. The pipeline will have a lifespan of 20 years,” he said.
He added that both sides had agreed to setting up the joint-venture company’s headquarters in Dhaka. The company is expected to be formed this year.
Officials said the cost of diesel imported from India would be less than what current suppliers charge locally.
The 130km green-field cross-border capacity product pipeline will connect an NRL terminal in India’s West Bengal town of Siliguri to a BPC depot in the town of Parbatipur in Dinajpur. It is expected to take two years to install.
Sources estimate the cost of the pipeline to be Tk450 crore, based on a preliminary survey. A draft feasibility report for the pipeline has been prepared.
Just seven kilometres of the pipeline will be on the Indian side of the border, with the rest falling on the Bangladeshi side.
A memorandum of understanding was signed on April 22 to import petroleum products, especially diesel, via the pipeline. But it retains an option to transport other white oil products in the future.
Bangladesh currently imports petroleum products from around 10 countries.
The country last imported diesel from India in 2007 via riverway, but the amount was very small. The import of petroleum products by river has since been discontinued.