“Bangladesh and China signed an agreement on Sunday to build this pipeline in the southeast of the country to unload oil from ships in the Bay of Bengal and deliver it onshore,” Nasrul Hamid, Bangladesh’s junior minister for power, energy and mineral resources told Reuters.

Under this project, storage tanks will be set up on Moheshkhali Island, some 10 km west of Cox Bazar, and the project cost will be around $550 million, energy officials said.

Exim Bank of China will provide the funding as a loan, which is to be repaid over 20 years, with an annual interest rate of 2 percent and a five-year grace period.

The project will be completed by 2020.

State-run Bangladesh Petroleum Corp currently unloads imported oil via ship-to-ship transfers into small coastal tankers. Once the pipeline project is completed the government will save about 10 billion taka ($120 million) annually on shipping and transfer costs, the minister said.

In December 2016, Bangladesh agreed with state-run China Petroleum Bureau for the engineering, construction and commissioning of a single point mooring system and other facilities.

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