The Numaligarh refinery, with a capacity of three million tonnes, is expected to be fully operational in a couple of months. Promoted by Bharat Petroleum Corporation and IBP, the Rs 2,600 crore project will also have Assam government and Oil India as partners.

The refinery was conceived as an ideal base for product supply to Bangladesh. The original proposal involved using barges to carry motor spirit and superior kerosene oil right up to Chittagong which would be a cost-effective operation. However, nothing came out of the plan as it involved finalising agreements between the governments of India and Bangladesh.

The current thinking points to a more practical route of meeting halfway at Haldia so that products from the refinery can be brought here from Numaligarh and towed away to Bangladesh. In return, the country can envisage exporting some of its own petro-products, which are in surplus to India. "Ideally, this is the best bet but we will have to wait and see how far the plan can actually be made a reality," sources said.

According to them, there has been some headway made where the ONGC has been invited to participate in activities like drilling, seismic surveys and training of personnel in Bangladesh. There have also been talks of laying a gas pipeline from Chittagong to Tripura via Myanamar given that natural gas is surplus in Bangladesh.

If this arrangement does materialise, there will be enormous scope for a product swap where the Numaligarh refinery will be a key factor from the Indian side. Sources also believe that once this happens, the ONGC could be inclined to picking a stake in the project, an idea that was mooted three years ago, and consolidate its presence in the north-east.

The Haldia plan would work wonders as far as transport costs are concerned but despite that, all arrangements have been made to carry the products from Numaligarh by rail to various regions in India. Talks are also on with the Oil Coordination Committee to provide tankers so that there is no disruption in supply in the event of problems occurring in the rail network.

The investment for the rail link has been made by IOC, HPCL, BPCL and IBP wherein 1,200 BTPN (bogie type petroleum new) wagons have been procured for Rs 204 crore. The wagons, which cost Rs 17 lakh apiece, have a capacity of 66,000 litres each which make them twice as large as normal ones. The products will be carried to New Jalpaiguri and thereon to parts of Uttar Pradesh and Bihar.

The wagons will be leased to the railways under the "Own your wagon scheme". Sources told The Financial Express that the largest investment has been made by IOC (Rs 116 crore to procure 684 wagons), followed by HPCL (Rs 40 crore and 234 wagons), BPCL (Rs 39 crore and 228 wagons) and finally IBP (Rs 9 crore to buy 54 wagons).

Around 48 wagons form a rake which means the present arrangement would translate into 25 rakes from the refinery. All have already been put into operation and work will start in full swing once the project is commissioned in June.