Prime Minister Narendra Modi and Prime Minister Sheikh Hasina jointly inaugurated the 131 km-long India-Bangladesh Friendship Pipeline on 18 March via video conference. This is the first cross-border energy pipeline between India and Bangladesh, built at an estimated cost of INR 377 crore, of which the Bangladesh portion of the pipeline built at a cost of approximately INR 285 crore, has been borne by the Indian government under grant assistance.

The pipeline has the capacity to transport one million metric tons per annum (MMTPA) of high-speed diesel (HSD) which will be supplied initially to seven districts in northern Bangladesh.

According to  India's Ministry of External Affairs, the operation of the India- Bangladesh Friendship Pipeline will put in place a sustainable, reliable, cost-effective, and environment-friendly mode of transporting HSD from India to Bangladesh and will further enhance cooperation in energy security between the two countries. 

The pipeline, which costs Rs 337.08 billion, would transport fuel from the state-owned Numaligarh Refinery Ltd. (NRL) marketing terminal in Siliguri, West Bengal to the Bangladesh Petroleum Corporation’s Parbatipur storage (BPC). A long-term deal for the sale of HSD was signed between NRL and BPC in April 2017. In October 2018  NRL and BPC agreed to a second 15-year agreement for the sale of gas oil (diesel) to Bangladesh.

Milestone in bilateral cooperation

Energy cooperation has been a key focus for both countries in recent years, as both face a growing demand to support their respective economic growth and development. The development in South Asia is significant in the context of the global surge in oil prices with a disruption in the supply chain because of the Ukraine war. 

The pipeline is a major step forward in bilateral cooperation. Firstly, one of its key benefits is that it will provide Bangladesh with a reliable source of natural gas, which is a cleaner and more efficient energy source compared to other fossil fuels like coal and oil. This is expected to help reduce air pollution and greenhouse gas emissions in Bangladesh, which will have positive impacts on public health and the environment. Additionally, the pipeline is expected to help improve energy access and affordability in Bangladesh, particularly in its rural areas.

Secondly, the pipeline will provide Bangladesh with access to a reliable source of natural gas from India, which will help reduce the country’s dependence on imported fuel and improve its energy security. The pipeline is also expected to help enhance India’s energy security by providing it with an opportunity to export its surplus natural gas.

Thirdly, the pipeline will create new business and investment opportunities in the energy sector, particularly in the natural gas sector. This will attract new investment and create new jobs, which will help support their efforts to achieve economic growth and development.

Fourthly, 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.

Diesel is a flexible fuel that may be used in a wide range of sectors, including industrial, transportation, and agriculture. Its import from India will not only increase the energy supply’s dependability but also lessen the nation’s reliance on a single energy source. Additionally, people and businesses in Bangladesh may pay less for energy because diesel is a very inexpensive fuel when compared to natural gas.

Will help BBIN countries 

Finally, as a result of the regional integration of the energy industry. Bhutan and Nepal would also benefit from the pipeline project. The two nations will have the chance to take part in the regional energy market and have access to a reliable energy source. The BBIN region’s economy will grow as the pipeline project fits in with the region’s overarching goal of enhancing integration and connectivity in South Asia. The BBIN nations are trying to establish a unified and integrated regional energy market, which will increase energy security and stability for the area. The pipeline project will act as a catalyst for increased regional integration and collaboration in other fields.

 Hence, the India-Bangladesh Friendship Pipeline represents a new era of energy cooperation and is expected to play a key role in strengthening the bilateral relationship between the two countries for many years to come.

 (The author is a strategic and international affairs analyst and researcher. Views are personal. He can be reached at johnrojariojnu@gmail.com)