Extension of cross-border diesel pipeline comes to a halt

India's plan to extend a cross-border diesel pipeline from Dinajpur's Parbatipur upazila to Natore will apparently see delayed implementation for the ongoing political crisis, according to the Bangladesh Petroleum Corporation (BPC) and an Indian media outlet. 

Inaugurated in March last year by former prime minister Sheikh Hasina and her Indian counterpart Narendra Modi, the pipeline stretches from Siliguri in West Bengal to an oil depot in Parbatipur.

The "Indo-Bangla Friendship Pipeline" (IBFP) has a capacity to convey 1 million tonnes of high-speed diesel per annum. It currently supplies the product to seven districts in northern Bangladesh.

This is the first cross-border energy pipeline between India and Bangladesh, built at an estimated Rs 377 crore, of which the portion in Bangladesh cost Rs 285 crore, borne through an Indian grant.

The BPC and Indian media outlet said the Indian authorities expressed interest in July to extend the pipeline and increase the volume of fuel export, which got the nod from Bangladesh.

"We verbally agreed on a proposal to conduct feasibility studies to extend the pipeline up to Natore. But they are yet to start the studies," Amin Ul Ahsan, chairman of the BPC, told The Daily Star on Monday.

There is neither an issue to reject the project nor an issue to halt the existing operation, he said.

"We didn't take up the issue in any discussion yet," the chairman added.

According to the officials, Bangladesh imported around 4,000 tonnes of diesel in August from Numaligarh Refinery Limited, located in Assam.

Four other import orders have been placed seeking around 7,000 tonnes in the upcoming days.

However, citing three people aware of the development, Indian news outlet Mint in a report claimed that the Bangladesh government has now "pressed the pause button" on a proposal to extend the 131 kilometre pipeline.

"Since the project has been operating well and has been largely successful, there was a consideration as to why not further extend it to cater to more places in the neighbouring country [Bangladesh]," it said.

"Now, after the political situation somewhat destabilised, India would like to wait for the situation to stabilise for any further consideration and talks. No specific timeline can be given," said one of the cited trio.

Another person told the Mint that along with diesel, India was also considering a proposal to send high sulphur fuel oil (HSFO) and furnace oil to Bangladesh -- which are largely used in the maritime industry and in heating homes, businesses and industrial units respectively.

Amin Ul Ahsan said Bangladesh failed to receive the fuel expected through the pipeline as all of the receiving tanks are yet to be brought under automation.

"We have some other issues, but we are continuing to import fuel through the pipeline as it costs less than importing from other countries. And we can save on internal transport costs as well," he added.