Bangladesh and India to establish oil pipeline joint venture next month

Bangladesh and India will establish next month a joint venture firm that will build the first onshore product pipeline from the Numaligarh Refinery, located near Bangladesh’s northeastern border in the Indian state of Assam, to Bangladesh. The Numaligarh Refinery is a joint venture between Bharat Petroleum Corp. Ltd. (BPCL), which is the majority stakeholder, the government of Assam, and Oil India Ltd. It has an annual crude throughput of three million metric tonnes.

Bangladesh Petroleum Corporation (BPC) and BPCL signed a memorandum of understanding (MoU) in April to establish the joint venture, which would be headquartered in Dhaka, Bangladesh.

The pipeline would be the first cross-country oil pipeline in South Asia. The initial capacity of the product pipeline is 300,000 tonnes per annum, which could potentially increase to 1.0 million within three to four years, a BPC official said.

Officials from the two state-owned companies held talks several times over the proposed pipeline and agreed to proceed with project implementation, The Financial Express reported. Both BPC and the BPCL have agreed to invest in the project, the BPC official added, although the investment amount has not been revealed.

If everything goes according to the plan, operations will start by 2016.

Once implemented, the pipeline is expected to reduce Bangladesh’s oil import costs and delivery times.

BPC has set a target of importing around 5.81 million tonnes of petroleum products in 2015, up 7.5%, at a cost of around USD 5.0 billion.