A joint feasibility study has begun on the construction of a 129-kilometre cross-country pipeline meant for carrying petroleum products from India's Numaligarh refinery into Bangladesh's 'master' petroleum depot, said officials.

However, pending installation of the pipeline, Bangladesh would start importing 0.05 per cent-sulfur diesel soon from India through Brahmaputra River with small barges. The quantity will be 2,000 tonnes per month, they said.

The two countries have finally selected the 129-km pipeline route of which 124 kilometres (kms) will be inside Bangladesh territory and the remaining 5 kms on the Indian side, state-run Bangladesh Petroleum Corporation (BPC) chairman AM Badrudduja told the FE Sunday.

Although most part of the pipeline would be built inside Bangladesh, the aggregate costs will be shared equally by the two countries, he expressed the hope. The two South Asian neighbours have selected one after scrutinizing four separate routes, said the BPC official. Dhaka and New Delhi have already agreed to establish a joint venture (JV) firm to build the pipeline jointly.

The BPC and the state-run Bharat Petroleum Corporation Ltd (BPCL) of India have inked a memorandum of understanding (MoU) to establish the JV firm to construct the cross-country oil pipeline.

The detailed feature including requisite investment, stakes of respective countries and wheeling charge to carry petroleum products through the pipeline would be sorted out under terms and conditions of the new JV firm.

The planned JV firm between the two countries would be responsible for building the pipeline and carry out its operation and maintenance.

Headquarters of the firm would be in Dhaka, Mr Badrudduja said. The BPCL will supply the diesel from its Shilghhat depot to the BPC's Baghabari depot, he said.

The cross-border pipeline might see, initially, 300,000 tonnes of refined oil products transported annually. Both BPC and BPCL have agreed to invest in the project, said the BPC official.

If everything goes according to plan, the BPC might start importing refined oils from Bharat Petroleum's refinery in India's northeastern Assam state within 2016.

The BPCL has 61.50 per cent stake in the 3.0-million-tonne-annual-capacity Numaligarh refinery located near Bangladesh's northeastern border.

Oil India Limited has 26 per cent stakes and the government of Assam holds 12.35 per cent takes with the refinery.

Once implemented, the pipeline is expected to reduce both cost of import and time spent on oil import besides cutting down transportation losses.

The volume of oil import could potentially increase more than threefold to 1.0 million tonnes per year within three to four years, said the BPC official.

BPC is keen to import mainly diesel from the Numaligarh refinery to meet mounting requirements, especially to operate the gasoil-run irrigation pumps in the northern region.

It has also planned to import other refined oil products as well in future, in line with domestic requirements.

The BPC has set a target to import around 5.81 million tonnes of petroleum in fiscal year 2015, up 7.50 per cent over the current calendar year, at a cost of around US$5.0 billion.

Gasoil imports account for more than half the total imports as the corporation has imported 3.0-3.5 million tonnes of gasoil over the past several years to meet a mounting domestic demand.

BPC's oil import has been on a steady increase over the past several years to meet the rising local demand, especially for oil-fired power plants.

Source:thefinancialexpress-bd.com