India to build pipelines for supply of diesel and gas to Bangladesh

The  Dollar Business Bureau

As part of the Framework of Understanding (FoU) on Cooperation in the Hydrocarbon Sector with Bangladesh, India is going to build two pipelines for diesel and natural gas between the two countries.

The FoU was approved by the Cabinet soon after the recent visit of Bangladeshi Prime Minister Sheikh Hasina. The said FoU is non-binding in nature and expires after five years.

With an objective of strengthening energy ties with its neighbours to enhance regional energy security, India will build a 131 km pipeline for diesel transportation from Siliguri in West Bengal to Parbatipur in Bangladesh. Another pipeline for natural gas will be laid from Dattapulia in West Bengal to Khulna in Bangladesh.

The 'Friendship pipeline' which will offer a logistical alternative to rail transportation of diesel, will be entirely financed by India. The new pipeline is estimated to carry 1 million tonnes of fuel per annum.

To increase its energy trade with the eastern neighbour, India also seeks to develop an import terminal in Bangladesh to export Liquified Natural Gas (LNG). For the same, an MoU (Memorandum of Understanding) has been signed between the Bangladeshi (state-owned) PetroBangla and India's Petronet LNG Ltd, a global energy firm that won the contract from among five global competitors shortlisted. The estimated cost of the project, which will have a capacity of 3.5 million tonne, is Rs 5,000 crore.

PetroBangla has also partnered with Reliance Power to set up an LNG import terminal In Bangladesh with a capacity of 500 million standard cubic feet per day. 

Bangladeshi leader Sheikh Hasina, who visited India after 7 years in April 2017, during her stay, had signed a 15-year agreement with India for supply of diesel.

Sheikh Hasina's visit saw the signing of over two dozen MoUs to strengthen cooperation in various sectors ranging from oil and energy to defence and military.