The construction work on 130-kilometre Bangladesh-India Friendship Pipeline between Siliguri in West Bengal and Parbatipur in Dinajpur kicked off on Thursday.
Abu Bakar Siddique, chairman of the Bangladesh Petroleum Corporation (BPC), formally inaugurated the project from Sonapukur of Dinajpur's Parbatipur upazila.
Prime Minister Sheikh Hasina and her Indian counterpart Norendra Modi laid the foundation of the project through videoconferencing in 2018.
The project is scheduled to be completed in 2022. Once completed, it will make it possible to bring fuel directly to Parbatipur's oil depot from India's Numaligarh.
Referring to this, the BPC chairman said, "It will reduce transport costs and solve the fuel crisis in the northern part of the country."
Currently, 16 northern districts in Bangladesh get fuel supply from the oil depot of Parbatipur which normally gets the supply from Baghabari through railway. Sometimes, oil is brought by trains from India as well.
A memorandum of understanding was signed between India and Bangladesh on 9 April 2018 to minimise the transport costs and ensure uninterrupted supply. The premiers of the two countries laid the foundation through videoconferencing on 18 September that year.
Around 43,000 tonnes of fuel oil could be transported through this pipeline annually.
Of the construction cost of Tk520 crore, Indian government is providing Tk303 crore and the BPC will meet the remaining Tk217 crore.
The transportation cost of each barrel of oil has been assessed of $5, which is $8 in cases of road and railway.