Bangladesh received approximately 9,000 tons of diesel to 0.005% sulfur from India via the new India-Bangladesh Friendship Pipeline in the second half of March, a senior Bangladesh Petroleum Corporation official told S&P Global Commodity Insights on April 11. India’s Numaligarh Refinery Ltd transported the oil from its Shiliguri marketing terminal via the pipeline to Bangladesh’s Parbatipur depot, the official said. Of the total imports, about 6,800 tons of diesel remained in the pipeline, the official added, noting that diesel had to remain in the pipeline to ensure a steady supply of fuel.
Bangladesh will continue to import diesel fuel through this pipeline in phases according to the country’s needs, especially for its northern districts, which are located far from seaports. “It will take only two to three days for Indian diesel to reach the districts of Bangladesh through this pipeline,” the BPC official said. The 3.77 billion Indian rupee ($45.86 million) project was inaugurated on March 21 and is part of the energy sector cooperation between the two countries, through which Bangladesh will import diesel from India. The pipeline runs for 125 km in Bangladesh and 5 km in India, passing through Panchagarh, Nilphamari and Dinajpur before reaching the Parbatipur oil storage facility in Bangladesh.
Progressive ramp-up of the new India-Bangladesh oil pipeline
Bangladesh will not be able to fully exploit the potential of the new pipeline until it completes the construction of 29,000 metric ton oil storage tanks at the Parbatipur depot. The tanks are currently under construction and are expected to be completed in the next few months, said BPC President ABM Azad. The pipeline gas oil will be consumed by the northern agricultural region, where the demand for gas oil is about 1.1 million metric tons per year, or about one-fifth of Bangladesh’s total gas oil requirements. The pipeline has an import capacity of about 80,000 metric tons of diesel per month, Azad said, adding that imports via the pipeline will be cheaper and more efficient than rail supplies.
According to the Minister of Petroleum, Energy and Mineral Resources, Nasrul Hamid Azad, the capacity of the pipeline will gradually increase to 400,000 metric tons per year in the first five years, and then may reach about 1 million metric tons per year. Capacity may also be adjusted periodically according to demand and imports may be extended beyond the agreed 15 years subject to mutual discussion.
The new India-Bangladesh oil pipeline: a “vital” role
Bangladesh Prime Minister Sheikh Hasina hailed the pipeline’s vital role in the country’s energy security as the world faces a severe energy crisis due to the war in Ukraine. She added that the pipeline will also contribute to the country’s economic growth by reducing the time and expense of importing diesel from India.
Bangladesh Petroleum Corporation (BPC) also resumed imports of refined petroleum products from India’s state-owned Indian Oil Corp (IOC) in March after a three-year hiatus. BPC has entered into an agreement with IOC to supply approximately 333,000 metric tons of 0.005 percent sulfur diesel, 40,000 metric tons of Jet A-1 fuel and 20,000 metric tons of 95 RON gasoline through December 2023, a BPC official said. Petroleum products will be transported by ships.
Prior to the launch of the pipeline, Bangladesh relied primarily on coastal tankers, railways and trucks to transport refined petroleum products to end-users, after imports from global suppliers reached the reservoirs in Chattogram, which has no major pipeline for oil transport. Small barges, mostly privately owned, were transporting petroleum products on river waterways for the PCB, Azad added.
