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The laying of the India-Bangladesh Friendship Pipeline at Bangladesh end at northern Nilphamari district will kick off this month.
Necessary pipes and equipment have started to arrive in the region to initiate the pipeline installation job.
Some 45 consignments carrying equipment out of a total 136 required has already arrived, said Bangladesh Petroleum Corporation (BPC) chairman Md Shamsur Rahman.
Work on the laying of the pipeline inside Bangladesh starts this month (March), he told the FE.
India has already initiated the pipeline fitting work inside its territory, Mr Rahman mentioned.
The cross-border friendship pipeline will be operational by June 2022, he said.
The total length of the pipeline will be 130 kilometres-125 kilometres inside Bangladesh and 5.0 inside India.
Currently, diesel is being brought to Parbatipur with rail wagons from Doulatpur oil depot in Khulna.
The fuel is brought to Doulatpur through coastal tanks from Chattogram after it is imported from international market through cargoes.
The BPC will purchase this diesel from Numaligarh Refinery Limited of Assam for 15 years.
The fuel is being bought at a premium rate of $5.50 per barrel to Mean of Platts Arab Gulf (MoPAG) diesel assessment on a cost and freight (CFR) basis.
MoPAG is the benchmark in oil pricing formula prepared by Platts, a US-based energy information provider and analyser.
Therefore, the diesel price will be above $5.50 per barrel from international price.
This premium rate is, however, almost double the existing premium rate for diesel, Mr Rahman cited.
The state-run BPC has been importing diesel from the global market at a premium rate of $3.25 per barrel to MoPAG diesel assessments on a CFR basis.
The cost of fuel transportation and the loss from evaporation are covered from the premium.
Although the premium rate is higher, sources said, diesel import through pipeline will save BPC's time, expenditure and hassle on account of its transportation from Chattogram port to Parbatipur.
Annually, the pipeline is planned to carry 250,000 tonnes of diesel to Bangladesh in first three years.
It will be gradually increased to 400,000 tonnes per year during the last five years.
Dhaka might import diesel beyond the already agreed 15 years following a mutual decision, the official added.
The pipeline will go through Panchagarh, Nilphamari and Dinajpur border belt to reach Parbatipur oil storage.
Once the pipeline work is done, Indian diesel will be consumed by clients in the northern region. The demand for diesel is an estimated 1.10 million tonnes in the country's 16 northern districts.
Separately, the BPC has been regularly importing 2,200 tonnes of diesel from Numaligarh refinery every month through railway since March 2016. Bangladesh earlier imported diesel from India for a brief period and in a small quantity of 3,500 tonnes from the Bharat Petroleum Corporation Ltd in 2007.
According to officials, the BPC also imported around 400,000 tonnes of diesel from Indian Oil Company Ltd during the 2005-2006 period.
azizjst@yahoo.com