Oil import from India thru pipeline to start next year: PM

Prime Minister Sheikh Hasina on Sunday expressed her optimism about starting import of fuel oil from India through pipeline next year.

"Bangladesh wants to import oil from India through pipeline and hopefully it will be done in the next year," she said.

The premier said this while an Indian delegation, led by Assam Legislative Assembly Speaker Biswajit Daimary, called on her at her official residence Ganabhaban in the capital.

Prime Minister's Press Secretary Ihsanul Karim briefed the reporters after the meeting.

The 131.57km under-construction India-Bangladesh Friendship Pipeline connecting Siliguri of West Bengal and Parbatipur of Dinajpur will carry the oil from India to Bangladesh, according to officials familiar with the matter. 

Some 126.5km of the line will be inside Bangladesh while the remaining 5.07 km will be in India. 

Of the construction costs amounting to Tk520 crore, the Indian government is providing Tk303 crore and Bangladesh Petroleum Corporation is providing the remaining Tk217 crore. Meghna Petroleum Limited, a company of Bangladesh Petroleum Corporation, is implementing the Bangladesh portion of the project.

Meghna Petroleum Managing Director Md Masudur Rahman told The Business Standard that the project will be completed by the first quarter of the next year.

However, he could not specify when they could import oil from India through the pipeline.

Officials at BPC said that the physical progress of the main pipeline is around 95% but the construction work of the fuel-receiving terminal and another pipeline connecting an oil-based power plant is yet to start.

Due to the price hike of construction materials and the ongoing dollar crisis, the project has been delayed, they said.

BPC plans to import around 2 lakhs to 3 lakh tonnes of fuel through this pipeline annually.

Currently, 16 northern districts get fuel supply from the oil depot at Parbatipur of Dinajpur, which normally gets its supply through the Khulna-Baghabari rail line. Sometimes, oil is brought in by trains from India as well.

The BPC faces problems sending the fuel from Chattogram to Dinajpur through roads and railways, especially when natural calamities occur and political tensions rise.

BPC officials said usually it takes 48 hours to send oil tankers from Chattogram to the northern region through waterways.

Rail routes take a shorter time than waterways, but the BPC cannot use the full capacity of the train carriages due to weaker railway tracks in the eastern region.

To deliver the required amount of oil to the northern region, the BPC needs to carry it first from the Chattogram to Mongla port. From there it is carried to Parbatipur through a broad gauge rail line.

The direct cross-border pipeline will carry fuel oil to Parbatipur without any of the hassle currently experienced, said BPC officials.

They added that currently, BPC spends around $8 to import and supply each barrel of oil.

The cost includes expenses of importing oil by ship from the Middle East to the outer anchorage of Chattogram port and delivering it to Dinajpur from there.

The cost of importing oil through the cross-border pipeline will come down to $5.5 per barrel once the project is operational, said BPC officials.