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Home Around South Asia

Bangladesh to sign 15-year deal to buy Indian gasoil on October 22

Editor by Editor
October 19, 2017
in Around South Asia, Bangladesh, Business, India, Top Story
Reading Time: 2 mins read
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Numaligarh (Assam) October 19 (Reuters) :Bangladesh Petroleum Corp (BPC) is set to sign on October 22, a 15-year deal with Indian oil refiner Bharat Petroleum Corp Ltd (BPCL)  to import gasoil to meet the country’s energy demand.

The sales and purchase agreement is expected to be signed during Indian Foreign Minister Sushma Swaraj’s visit to the capital of Dhaka, BPC officials said.

The deal will be the country’s first long-term agreement with any Indian supplier.

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BPCL will supply up to 250,000 tons of gasoil each year from its majority owned Numaligarh refinery for the first three years of the deal to the BPC’s northern fuel depot via a 131-km (79 miles) pipeline, which will be built by India, they said.

“The volume will be increased in line with our demand,” said one of the officials, adding the deal would come into effect when the pipeline is built.

Numaligarh refinery is already supplying a small volume to the state-owned BPC for the country’s northern region.

The refinery, located in the eastern Indian state of Assam, will supply around 22,000 tons of gasoil with a sulphur content of 500 parts per million (ppm) between October and December by railroad, the officials said.

BPC will pay a premium of $5.50 per barrel over Middle East quotes under the 15-year deal, up from the current premiums of $2.20 a barrel for gasoil cargoes it receives by tanker through the country’s southeastern port of Chittagong, said one of the officials.

“This is cost-effective because there is no additional transport cost as the supply is being unloaded in our depot in the northern part,” the BPC official said.

BPC received its first batch this month under the three-month agreement and its fourth since 2016 amid warming ties between the two neighboring countries.

Bangladesh typically ships in around 3.2 million tons of diesel and 2.5 million tons of fuel oil annually.

Sellers include Kuwait Petroleum Corp, Malaysia’s Petroliam Nasional Berhad, Emirates National Oil Company, Philippines National Oil Co, Vietnam’s Petrolimex, Thailand’s PTT, Indonesia’s Bumi Siak Pusako and Zhenhua Oil.

(The featured picture at the top shows the Numaligarh refinery in Assam)

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