BPC aims to bring Indian oil thru pipeline this year
Bangladesh Petroleum Corporation (BPC) is going to import 90,000 tonnes of diesel from India this calendar year and it looks to bring a portion of the petroleum through a 131-kilometre Bangladesh-India Friendship Pipeline (BIFP), which is likely to become operational in 2022, officials said yesterday.
The state agency has been importing diesel from Numaligarh Refinery (NRL) since 2016 on railway wagons via Banglabandha in the northwest border to store the oil in its Parbatipur oil depot in Dinajpur.
But as construction of 125 kilometres of the BIFP in Bangladesh has already been complete, the officials expect that they would be able to bring the petroleum through the pipeline.
The construction of the pipeline was inaugurated by Prime Minister Sheikh Hasina and her Indian counterpart Narendra Modi in September 2018.
"For the time being, we will bring oil through railway wagons. We are also hopeful that we will be able to import oil through the pipeline from this year," said BPC Chairman ABM Azad.
He said 10 per cent to 15 per cent of the works of the pipeline was remaining.
He shared the update after the cabinet committee on purchase gave the nod to the $5.5 premium per barrel for insurance and other costs to import diesel from NRL India via Siliguri, West Bengal.
Price of diesel is determined based on five-day average prices (two day before and after the day of loading of the petroleum) in the international market, said officials.
The BPC officials said the agency imported around 60,000 tonnes of diesel from the NRL in 2021 and it stores the oil in its Parbatipur depot to meet part of demand for irrigation, transport and other purposes in the north, the major agricultural belt.
Apart from helping the BPC diversify energy sources, imports through Siliguri of the neighbouring country to the Parbatipur depot has enabled the agency to reduce losses and transport costs which it had to incur earlier for transporting the oil from Chattogram, said an official.
In order to import oil smoothly, both the agencies took up the BIFP project having one million metric tonnes of transmission capacity annually.
Under the initiative, the BPC took a Tk 300 crore project for land acquisition and requisition for the pipeline apart from construction of eight tanks.
Six tanks with a capacity of 4,800 tonnes each and two water reservoirs for fire-fighting are under construction at the Parbatipur depot, said a senior official of Meghna Petroleum, one of the three state oil marketing companies.
Besides, a pipeline will be constructed to provide oil to a power plant being built there.
The official said the 5-km pipeline falls in India and crosses the Mahananda river of Panchagargh.
Works related to the river crossing are ongoing, he said, adding that the pandemic affected the project's pace.
"We expect to complete commissioning by June," he said, adding that they would give connection of the pipeline to the existing depot.
The BPC project was started in January 2020 and is scheduled to end in June 2022.
The Hindu on December 16 last year quoted India's foreign secretary, Harsh Vardhan Shringla, as saying that the work on the pipeline would enable the two countries to integrate their energy needs.
The work is progressing well and the pipeline could be inaugurated next year, he said. Bangladesh annually requires 47 lakh tonnes of diesel out of its need for more than 85 lakh tonnes of petroleum.
After the yesterday's meeting of the cabinet committee on purchase, Finance Minister AHM Mustafa Kamal, replying to a question regarding reduction of prices of petroleum, said the energy ministry would consider the issue.
But the government will consider the issue if prices decline in the international market, he added. The BPC officials, however, said petroleum prices were volatile in the global market and a price cut at this moment was unlikely.
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