BD to import refined oil from India thru onshore pipeline

Bangladesh and India will form a joint venture (JV) firm to build the first-ever onshore pipeline between the two neighbouring countries in South Asia to carry petroleum products from India's Numaligarh refinery to Bangladesh, said officials.
The state-run Bangladesh Petroleum Corporation (BPC) and the Indian state-run Bharat Petroleum Corporation Ltd (BPCL) have inked a memorandum of understanding (MoU) to establish the JV firm to lay down the cross-country oil-carrying pipeline, BPC chairman AM Badrudduja told the FE.
"We might sign another agreement over the JV firm within the next three months," he said.
The detailed features including required investments, stakes of respective countries and wheeling charge to carry petroleum products through the pipeline would be sorted out in the terms and conditions of the new JV firm, Badrudduja said.
The planned JV firm between the two countries would be responsible for building the pipeline and carrying out its operation and maintenance, he said.
Headquarters of the JV firm would be in Dhaka, Mr Badrudduja said.
If established, the pipeline would be the first cross- country pipeline to carry any sort of energy between these two neighbouring countries in South Asia.
Both the state-owned petroleum companies of Bangladesh and India agreed earlier to build together the first cross-country oil pipeline between them that will see an initial 300,000 tonne per year of refined oil products to be transported from BPCL's Numaligarh refinery to Bangladesh.
Officials from the two state-owned companies held discussions several times over the proposed pipeline and agreed to go ahead with the project for implementation.
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 oil products from the Bharat Petroleum's refinery in India's northeastern Assam state within 2016.
The BPCL has 61.5 per cent stake with the 3.0 million tonne per year capacity Numaligarh refinery located near Bangladesh's northeastern border.
The Oil India Limited has 26 per cent stakes and the government of Assam has 12.35 per cent stakes with the refinery.
Once implemented, the pipeline is expected to reduce Bangladesh's oil import costs and importing time as well as transportation losses.
The BPC, Bangladesh's sole oil importer, is planning to initially import around 300,000 tonne of refined oil products every year from the refinery, which could potentially increase by more than three-folds to 1.0 million tonne per year within three to four years, said the BPC official.
The BPC is keen to import mainly gasoil from the Numaligarh refinery to meet its rising needs, 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 tonne of petroleum products in 2015, up 7.50 per cent from the current calendar year, at a cost of around US$ 5.0 billion.
Gasoil, or diesel, import accounts for more than half of the country's total imports as the corporation has been importing 3.0-3.5 million tonnes of gasoil over the past several years to meet the mounting domestic demand.
The BPC's oil import has been increasing steadily over the past several years to meet the rising local demand, especially for oil-fired power plants.
    mazizur.rahman@outlook.com