Bangladesh has made significant progress in recent years. Every Indian is proud of it and we are delighted that we were able to contribute to this development journey of Bangladesh.” PM Ways he said in his speech at the virtual event.
“I am confident that this pipeline will further accelerate the development of Bangladesh and be an excellent example of increased connectivity between the two countries,” he added.
The two PMs had joined the innovative pipeline ceremony in September 2018.
The newly inaugurated pipeline stretches 125 km inside the territory of Bangladesh and 5 km inside India and is significant for the following reasons:
First cross-border energy pipeline
This is the first cross-border energy pipeline between India and Bangladesh that Delhi would use. The pipeline was built with about Rs 3.46 billion, drawn from the Indian Line of Credit (LoC), to export diesel to Dhaka and Bangladesh Petroleum Corporation officials.
Cost and capacity
It was built at an estimated cost of Rs 377 crore. The Bangladesh part of the pipeline was constructed at a cost of around Rs 285 crore which was supported by the Government of India with grants.
The pipeline has a capacity to transport 1 million metric tons per year (MMTPA) of diesel, which will initially be supplied to seven districts of Northern Bangladesh.
Hope in times of crisis
Bangladesh imports most of the fuel it needs for electricity.
High global prices forced Bangladesh to cut its imports in 2022 despite a surge in energy demand, resulting in fuel shortages that forced millions of citizens into hours of darkness every week during the second half of last year.
Temperatures typically begin to rise from the end of March, and BIPPA estimates that power producers will require 2.12 million tons of fuel oil in the four months to June 2023.
Initially, Bangladesh would purchase around 2.5 lakh tonnes of diesel. It would then increase up to 4-5 lakh tons in the following years.
It costs about USD 8 for each barrel of fuel to transport from the port city. The pipeline would reduce the cost to about $5 a barrel. It will also reduce the transport time to just one hour compared to the current situation of taking several days to transport the diesel via wagons and trawlers
Fast delivery at minimum cost
The India-Bangladesh Friendship Pipeline would help provide stable diesel supply in all 16 northern districts under Rangpur and Rajshahi in Bangladesh.
It will ensure fast delivery of fuel at minimal cost. Currently, imported diesel is supplied to these regions via wagons and trawlers from Chattogram and Mongla ports.