Samara Ashrat

Samara Ashrat is a Ph.D. fellow at the University of Bucharest. Her areas of interest are South Asian Politics, Security, and the economy. She occasionally contributes to several newspaper and blog portals including The Observer Bangladesh, Dhaka Tribune, The Daily Ittefaq etc.

Bangladesh: Benefit Friendship Pipeline

Published on
/

To consolidate cross-border energy security, Bangladesh and India scripted another golden chapter in their bilateral ties through the launch of the operation of the India-Bangladesh Friendship Pipeline (IBFP) for diesel supply on March 18.

The operation of the Bangladesh-India Friendship Pipeline will put in place a sustainable, reliable, cost-effective, and environment-friendly mode of transport in High-Speeded Diesel from India to Bangladesh. The project is jointly implemented by the Numaligarh Refinery Ltd of India and Meghna Petroleum Ltd of Bangladesh.

The 131.57 km long pipeline project connects Siliguri, West Bengal, and Parbatipur, Dinajpur. Of the pipeline’s total length, 126.50 km is inside Bangladesh while the remaining 5.07 km is in India. About 1 million metric tons of diesel can be imported from India annually through the pipeline. However, two and a half lakh tons will be imported in the initial phase According to the 15-year agreement, the import volume will increase to 4 to 5 metric tons per year. Bangladesh can be benefitted from this High-Speed Diesel cost-effectively and sustainably.

The Diversification

First of all, the present energy crisis in Bangladesh is partly due to over-dependence on gas which fulfills more than 70 percent of its energy needs. The present gas deficit against the national demand daily is expected to increase further in the future. The crisis will deepen unless a greater share of renewable and no renewable energy is included in the energy mix. So, Bangladesh needs to transition from conventional energy sources to ensure its energy security & long-term sustainability. In this context, cross-border energy cooperation can be a sustainable mode of energy transport which can help Bangladesh to mitigate energy shortage. The diversification of Bangladesh’s energy industry is aided by the import of diesel from India. Bangladesh’s current heavy reliance on natural gas as its main energy source makes it susceptible to changes in price and supply. Diesel’s inclusion in the energy mix gives the nation a more reliable and secure energy supply.

Growth in Agricultural Sector

One of the main conditions for development is uninterrupted power and energy supply. The operationalization of the India-Bangladesh Friendship Pipeline will enhance ongoing energy cooperation between the two countries and will further grow in Bangladesh, particularly in the agriculture sector. As the demand for diesel is highest in 16 districts of the northern region during Aman and Boro season, the government decided to import this fuel through the pipeline. If the project is implemented, diesel can reach the consumer level in 16 districts of the Rangpur and Rajshahi divisions in a short time. As a result, it will be able to provide it to the farmers at a low cost in a short period besides saving a huge amount of money. Not only that, this pipeline will open new employment opportunities for both countries.

Cost and Time Effective

India-Bangladesh diesel trade had been ongoing since 2017 carried by train. The cost of transportation was a huge sum of amount for Bangladesh Petroleum Company. About 2,200 tonnes of diesel is sent from Numaligarh Refinery Limited (NRL) through West Bengal Railway every month. Moreover, according to BPC, it has to pay an average premium of $11.50 per barrel (159 liters) for bringing fuel oil (including freight). It can be eight dollars if imported through this pipeline. A reduction of 5.5$ per barrel can save about 9.75 million dollars per 100,000 tons. People of 16 districts of the northern region will be able to enjoy this benefit in addition to taking less time in fuel supply.

Reduce System Loss and Carbon Footprint

This pipeline will be a milestone in providing quick and uninterrupted fuel supply to the northern region of the country in a cost-effective manner. Apart from uninterrupted, cheaper, and quicker energy supply security, the cross-border pipeline is expected to help BPC reduce the system loss that it incurs in the form of pilferage. Because no one can be able to reach the underground pipeline to commit petty theft.

The automatic and computerized process will reduce the system loss drastically. The Fellowship Receipt Terminal will be the country’s first modern automatic and computerized system. If something is done in the pipeline on the way or otherwise, the place of automaticity can be identified immediately.

Not only that, the supply of diesel through the pipeline would reduce the system loos and as the pipeline is situated underground, it will also reduce the carbon footprint of the supply.

Enhanced Energy Cooperation

Through this pipeline, an alternative source of diesel import is being created for Bangladesh.  In addition to reducing the cost, it has created a big ring for fuel security. At least 40,000 liters of fuel have been stored at the terminal and depot for two months. According to Bangladesh Petroleum Corporation, Bangladesh imports 6.5 million tons of fuel oil annually. Of that, 4 million tons of diesel is imported annually. Through this pipeline, almost fifty percent of imported fuel will come to this country by reducing the significant amount of transportation costs. 

Future Prospects of the Pipeline Energy Cooperation

This successful operation of this pipeline might bring new pipeline opportunities for Bangladesh. India also wants to use pipelines to secure the energy security of its northeastern states. India in its bid to save time and cost of transporting liquefied natural gas (LNG) and liquefied petroleum gas (LPG) to the North Eastern states, wants to set up facilities along the Bangladesh coast. The IOCL has proposed to build an LPG bottling plant in a joint venture with BPC and LNG terminal in another joint venture with state-run Petrobangla imported LNG, after re-gasification, will be supplied to the North Eastern states using Bangladeshi pipelines, while the imported LPG will be bottled in the neighboring country and also be supplied there.

The pipeline project has been successfully implemented because of the true friendship between India and Bangladesh. Enhanced energy cooperation through bilateral and multilateral arrangements can address the challenges posed by high fuel prices in the wake of Russia Ukraine war. And India Bangladesh Friendship Pipeline is a striking example of bilateral energy cooperation. Once diesel starts to arrive in Bangladesh, it will usher a new dimension to the energy cooperation between India and Bangladesh.

You might be interested in

Bangladesh’s role in the security of India’s Chicken Neck and Beyond

Published on
/

India had always found Bangladesh by its side when needed. The bilateral security relation had always been reciprocal. Bangladesh has shown its commitment to the security issues of India. Especially the trend started when the prime minister of Bangladesh Sheikh Hasina Came into power. As well as, the credit for a reciprocal security relationship goes to the Prime Minister for addressing India’s security concerns.

The northeast region of India is one of the most vulnerable areas in terms of security. Security cooperation has been a major feature in Bangladesh–India bilateral ties. India sees Bangladesh as the closest partner in ensuring security in its geographically disadvantaged northeast states. The security issues like terrorism, insurgency, and separatist movements in the northeast region have been controlled and managed, partly because of the immense help provided by Bangladesh. Bangladesh has taken significant steps in dealing with major northeastern insurgent organizations and maintained close cooperation with India in terms of intelligence sharing and security matters.  In addition, Bangladesh has also entered an Extradition Treaty with India in January 2013 to address the security concerns of each other and strengthening mutual trust. With the treaty, India gained a way to clamp down on insurgency in the northeastern region of the country. Not only that, the militants of northeastern states failed to get any shelter in Bangladesh because of the land border agreement with Bangladesh signed in 2015. This stopped them from carrying out their operations for separatist movements and insurgencies in the North East. The incumbent Indian External Affairs Minister S Jaishankar showed his gratitude towards Bangladesh by saying that, the terrorist activities in the country’s northeast region have declined because of India’s strategic land boundary pact with Bangladesh.

Terrorism is one of the pressing security issues in both Bangladesh and India. As mentioned before, Bangladesh has a significant role in fighting terrorism in northeastern states as they had been facing longstanding insurgency movements. In the past, the insurgents used to use the territory of Bangladesh as their base. But this situation was strong-handedly mitigated after Prime Minister Sheikh Hasina came into power. Her commendable actions against the terrorists have contributed to opening up a new era of cooperation between the two countries.

For example, Bangladesh handed over top Ulfa leader Anup Chetia, a founding member of one of India’s top insurgent groups United Liberation Front of Asom (Ulfa), to India 18 years after his arrest in Dhaka for trespassing. This person had been in prison since his arrest in Mohammadpur on December 21, 1997. It was a major boost to bilateral security cooperation between India and Bangladesh. Not only that, Bangladesh sent back some other top Ulfa leaders, including ArabindaRajkhowa, in 2009 through the border with the northeastern Indian state of Assam. Both extraditions expedited the process of peace talks between the separatists and New Delhi.

Moreover, the government of Sheikh Hasina strengthened oversight mechanisms in border areas to arrest any kind of smuggling of illegal consignments for the insurgents operating in the northeastern states of India. Bangladesh has handed over to India a list of several factories operating inside their country including some close to the border of northeastern states of India which produced phensidyl only targeting Bangladesh as its market. The phensidyl produced in those factories, set up by the Indian businessmen, were being smuggled into Bangladesh by organized cross-border syndicates.

The northeastern states are almost detached from the Indian mainland. The terrorists and separatists take the advantage of the “Chicken’s Neck” and carried out their insurgent movements in these states. Bangladesh, in turn, has been always by India’s side in combating the situation though some views of India and Bangladesh are completely different. Therefore, the divergent views of India and Bangladesh to understand security issues need to be synchronized for mutual benefit. Only active security engagement between the two countries would help in transforming relations from the present state of mutual suspicion to one of mutual benefit and mutual trust.  Both of the countries should consider the bilateral issues from a pragmatic view to reach a consensus on contentious bilateral issues as well as to further strengthen this relationship to a new horizon of development. A long-standing durable relationship between the two countries is necessary to maintain stability in the northeastern states of India.

Views expressed are personal

You might be interested in