A 131.57-kilometre cross-border 'Indo-Bangla Friendship Pipeline' was inaugurated on Saturday as part of cooperation in energy sector between the two neighbouring countries through which Bangladesh will import petroleum products, especially diesel from India.

Prime Minister Sheikh Hasina and her Indian counterpart Prime Minister Narendra Modi formally inaugurated the newly built pipeline.

Hasina was connected from her official residence Ganabhaban while Modi was connected from his office in New Delhi.

Of the pipeline, 126.57 kilometres are in Bangladesh while the remaining 5 kilometres have been installed in India.

The BPC, the state agency under the Energy and Mineral Resources Division, has been implementing the project under a 15-year deal with India to annually import 250,000 tonnes to 400,000 tonnes of diesel from the neighbouring country through the cross-border pipeline.

The deal was signed in 2017 following the approval of the Cabinet Economic Affairs Committee on August 23.

Bangladesh annually needs to import 6.6 million tonnes to 7.7 million tonnes of diesel to meet its demand.

According to official documents, the whole consignment of petroleum will come through the cross-border pipeline from India's Numaligarh refinery, located in Golaghat in north-eastern Indian state of Assam, while Bangladesh will receive it at Parbatipur petroleum fuel depot in the north-western district of Dinajpur.

Read more: Bangladesh-India Friendship Pipeline to vastly improve transport of diesel: New Delhi

Official sources said though most part of the proposed pipeline is to be laid in the Bangladesh part, the Indian government has provided about Rs 303 crore as a loan under Indian line of credit (LOC) to build the Bangladesh portion.

Bangladesh will operate the pipeline in its part while India will operate the pipeline in its portion.

The documents also reveal that Bangladesh will annually import 250,000 tonnes in the first three years, 300,000 tonnes annually in the 4th to 6th years, 350,000 tonnes annually in the 7th to 10th years and 400,000 tonnes annually from the 11th to 15th year.

Currently, Bangladesh has been importing 22,000 tonnes of diesel per month using railway wagons.

The deal could be extended for a further period of time.

Such petroleum imports from India through cross-border pipelines will help create a stock of petroleum in the northern region to meet the growing demands in that part of the country.

Indian Ministry of External Affairs on Friday said that the operation of the Bangladesh-India Friendship Pipeline will put in place a sustainable, reliable, cost-effective and environment-friendly mode of transporting fuels from India to Bangladesh.

It will further enhance cooperation in energy security between the two countries.

This is the first cross-border energy pipeline between India and Bangladesh, built at an estimated cost of Rs 377 crore, of which the Bangladesh portion of the pipeline built at a cost of approximately Rs 285 crore, has been borne by the government of India under grant assistance.

The Pipeline has a capacity to transport 1 million tonnes per annum of High-Speed Diesel (HSD).

It will supply HSD initially to seven districts in northern Bangladesh.