Bangladesh receives first shipment of gas oil via new India-Bangladesh pipeline

Of the total imports, about 6,800 tons of gas oil remained in the pipeline, the official said, adding that some gas oil must remain in the pipeline to ensure a smooth supply of fuel.

Bangladesh will continue to import gasoil through this pipeline as per the country’s needs, especially for its northern districts, which are far from seaports.

“It will only take two to three days for Indian gas oil to reach districts of Bangladesh through this pipeline,” the BPC official said.

The 3.77 billion Indian rupees ($45.86 million) project was inaugurated on March 21 and is part of an energy cooperation between the two neighbors that will see Bangladesh import gas oil from India.

The pipeline stretches 125km across Bangladesh and 5km across India, passing through Panchagarh, Nilphamari and Dinajpur before reaching the Parbatipur oil storage facility in Bangladesh.

hurdles remain

However, Bangladesh will only be able to realize the full potential of the newly built pipeline once the construction of oil storage tanks with a capacity of 29,000 mt at the Parbatipur depot is completed. The tanks are currently under construction and should be completed in the next few months, BPC Chairman ABM Azad said.

Indian pipeline gasoil is consumed by the northern agricultural region, where gasoil demand is around 1.1 million tons/year, which is about one-fifth of Bangladesh’s total gasoil demand.

The pipeline has the capacity to import around 80,000 tons of gas oil per month, Azad said, adding that imports via the pipeline are cheaper and more efficient than shipments by rail.

BPC has been buying 0.005% gasoil from NRL at a negotiated premium of $5.50/b over the Arabian Gulf’s Mean of Platts gasoil ratings on a CFR basis for 15 years, he said.

Initially, the pipeline is expected to transport about 250,000 tons of gas oil per year under the agreement between the two countries, BPC’s senior official said. The volume will gradually increase to 400,000 t/year in the first five years and thereafter may increase to around 1 million t/year, Azad said.

The volume can also be adjusted periodically according to demand, and imports can be extended beyond the agreed 15 years, subject to mutual discussions, he added.

Bangladesh Prime Minister Sheikh Hasina said this development plays a crucial role in ensuring the country’s fuel security at a time when the world is facing a serious energy crisis due to the Ukraine war.

“Aside from ensuring fuel security, the pipeline will boost economic growth,” she said.

Hasina said the pipeline will significantly reduce the time and cost of importing diesel from India.

BPC resumes imports of refined products from IOC

BPC began receiving refined petroleum products from India’s state-owned Indian Oil Corp in March after a three-year hiatus.

State-owned BPC has signed a contract with state-owned Indian Oil Corp to supply about 333,000 tons of 0.005% sulfur gas oil, 40,000 tons of Jet A-1 fuel and 20,000 tons of 95 RON gasoline by December 2023, the BPC official said . The oil products are delivered by water vessels.

Prior to the launch of the cross-country pipeline, Bangladesh relied solely on coastal tankers, railroads and trucks to transport refined oils to end users after imports from global suppliers reached tanks in Chattogram, which has no major oil-carrying pipeline.

Small, mostly privately owned barges transported petroleum products on river routes for BPC, Azad added.

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