Pipeline with India will halve fuel oil transportation cost for Bangladesh: state minister

Hasina and Modi are set to inaugurate the pipeline, now in an experimental phase, on Mar 18

The pipeline with India will cut transportation cost of fuel oil for Bangladesh by 50 percent, State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said.

Prime Minister Sheikh Hasina and her Indian counterpart Narendra Modi are set to inaugurate the pipeline, now in an experimental phase, on Mar 18.

During a visit to the receipt terminal at Parbatipur in Dinajpur on Friday, Nasrul described the India-Bangladesh Friendship Pipeline as groundbreaking in Bangladesh’s energy history. “It will ensure energy security and low-cost fuel.”

The oil from the pipeline will be supplied to 16 districts in the north and a power station in Syedpur.

Bangladesh pays $11 in premium per barrel of fuel oil purchased from the international market, while the premium will be $5.5 per barrel in the pipeline project, according to Nasrul. “It means we will be able to save around $6 per barrel in premium.”

When diesel is brought from the international market, Bangladesh needs to transport the fuel oil to Chattogram port or Daulatpur port in Khulna from the tankers. The oil is later taken to Parbatipur by using trains.

“It is an expensive and time-consuming process. Strikes and factors sometimes disrupt supply in this process,” said Nasrul.

He said there should not be concerns about the standard of oil from oil because Bangladesh would control the quality. The rate of sulfur in the fuel oil will be 10 parts per million, the global standard, Nasrul said.

In Parbatipur, basket filtering technology has been installed but the six storage tanks are not yet ready. The oil will be stored in Bangladesh Petroleum Corporation’s old storage in the area.

According to the deal, India will send 200,000 tonnes of oil annually in the first three years, 300,000 tonnes per annum in the next three years, 500,000 tonnes annually in the next four years and 1 million tonnes annually afterwards.