India, Bangladesh, Nepal and Bhutan’s benefit from friendship pipeline

John Rozario

(johnrojariojnu@gmail.com)

Prime Minister Narendra Modi and Prime Minister of Bangladesh Sheikh Hasina may inaugurate the 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 Government of India under grant assistance.

The Pipeline has a capacity to transport one Million Metric Ton Per Annum (MMTPA) of High-Speed Diesel (HSD). It will supply High Speed Diesel initially to seven districts in northern Bangladesh.

The India-Bangladesh Friendship Pipeline is a bilateral energy project between India and Bangladesh that has the potential to significantly enhance energy cooperation between the two countries. It is significant for its interconnectedness since it goes through the border of Bangladesh and India. It will also pave the way to regional integration in terms of energy as well. The pipeline will ensure stability in the energy domain of Bangladesh, which is expected to help meet Bangladesh’s growing energy demand and reduce the country’s dependence on imported fuel. Besides, other regional actors will be benefitted from it also. Therefore, a new era of energy cooperation will be experienced.

A long-term deal for the pipeline sale of high-speed diesel from India to Bangladesh was signed by NRL and BPC in April 2017. The next year, in October, NRL and BPC agreed to a second, 15-year agreement for the sale of gas oil (diesel) to Bangladesh.

However, the India-Bangladesh Friendship Pipeline is seen as a significant step forward in the bilateral relationship between the two countries, particularly in the energy sector. Energy cooperation has been a key focus for both countries in recent years, as both Bangladesh and India face a growing demand for energy to support their respective economic growth and development. The pipeline is expected to enhance energy security for both countries and help support their efforts to achieve sustainable energy development. All these are happening while the world is going through a surge of oil prices with a disruption in the supply chain for the ongoing Ukraine war. Over the next sections, the significance of the pipe and the way forward will be discussed.

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). As per a senior NRL official who spoke to PTI under the condition of anonymity and was quoted by our New Delhi-based correspondent, the mechanical work on the bilateral project—which is being funded by India—was finished on December 12 of last year. The 130-km IBFPL’s groundbreaking ceremony was held in September 2018 with the prime ministers of Bangladesh and India participating via video conference. Markedly, Narendra Modi, the prime minister of India, and Sheikh Hasina, the prime minister of Bangladesh, reached an agreement to finance this pipeline in 2017 which has an annual capacity of one million metric tons (MMTPA). It is probable that the 130-km India-Bangladesh Friendship Pipeline (IBFPL), which will be used for cross-border energy transfer, will begin this year and there are efforts going on at the highest level of the governments. Nasrul Hamid, the state’s minister of power, announced on January 16 that an experimental pipeline will begin bringing in fuel from India in June 2023. 126.5 km of the 131.5-kilometer pipeline is in Bangladesh, and 5 km is in India.

The pipeline will bring some major changes in the domain of cooperation between the two countries. The next sections will shed light on it.

Firstly, one of the key benefits of the India-Bangladesh Friendship Pipeline 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 rural areas.

Secondly, the pipeline will help enhance energy security for both countries by reducing the reliance on imports of fuel and other energy sources. 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. At the same time, the pipeline is also expected to help enhance India’s energy security by providing it with an opportunity to export its surplus natural gas to Bangladesh.

Thirdly, the India-Bangladesh Friendship Pipeline will boost economic growth and development in both countries. 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 in both countries, which will help support their efforts to achieve economic growth and development.

Fourthly, 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.

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.

Finally, 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 BIBN region’s economy will grow and become more stable as a result of the regional integration of the energy industry. The pipeline project fits in with the region’s overarching goal of enhancing integration and connectivity in South Asia. The BIBN 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 including trade.

Since the pipeline project is a shining illustration of how close India and Bangladesh are to one another. The pipeline project will strengthen the already-established commerce and cultural exchanges between the two nations.

In conclusion, the India-Bangladesh Friendship Pipeline is a bilateral energy project that has the potential to significantly enhance energy cooperation between Bangladesh and India. The pipeline will provide Bangladesh with a reliable source of natural gas, improve energy security for both countries, and help support their efforts to achieve sustainable energy development. The pipeline will boost economic growth and development in both countries by creating new business and investment opportunities in the energy sector. Hence, the India-Bangladesh Friendship Pipeline represents a new era of energy cooperation between India and Bangladesh and is expected to play a key role in supporting the bilateral relationship between the two countries for many years to come.