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Deal reached on Myanmar gas for India via Bangla

From Indian Express
January 14, 2005
link to this article.

NEW DELHI, JANUARY 13: Within a week of India sealing a $40 bn LNG deal with Iran, Bangladesh today agreed to make space for a $1 bn 290-km gas pipeline that will run from Myanmar all the way to Kolkata.

The breakthrough was achieved in a tripartite meeting between Petroleum Minister Mani Shankar Aiyar, Myanmar's Minister for Energy Brig Gen Lun Thi and Bangladesh State Minister for Energy and Mineral Resources A K M Mosharraf Hossain in Yangon.
As part of the agreement, Bangladesh, which had sought the right to access hydro-electricity from Nepal and Bhutan through Indian territory and a corridor to supply commodities to these countries, has reserved the right to inject and siphon off gas from the pipeline.

Briefing reporters from Yangon, Aiyar said that while Bangladesh can transit its own gas, India can use the line to move gas from North East to West Bengal and Bihar.
Bangladesh will earn about $125 million annually as transit fee of the pipeline, which will run though Arakan in Myanmar, Mizoram and Tripura before crossing Bangladesh to Kolkata. India will also ''favourably'' examine Bangladesh's request for transit right to Bhutan and Nepal, Aiyar said.

According to Aiyar, ''it is a triumph because for the first time in 30 years, Bangladesh has agreed to its territory being used for transport of any commodity.''
Aiyar said the pipeline is one of several options being considered by India to access gas reserves at a Shwe field block in offshore Myanmar, as well as volumes that are expected to be discovered in the adjacent block.

In both the blocks, OVL has 20 per cent stake and Gail has 10 per cent.
South Korea's Daewoo is the operator of both the blocks.

''Some gas might come in form of compressed natural gas (CNG) in ships, which can make two round trips from Myanmar to east coast of India every day. We could also do it by putting up a liquefication plant (in Myanmar) and exporting LNG to India and other countries,'' said Aiyar.

Myanmar has huge natural gas reserves and ''we are keeping all options open and neither is mutually exclusive,'' said Aiyar.

India, Bangladesh and Myanmar also agreed to form a techno-commercial committee to go into issues such as size, length, routing, pricing and quality of gas.
''The route of the pipeline may be determined by mutual agreement of the three governments with a view to ensuring adequate access, maximum security and optimal economic utilisation,'' said Aiyar.

The first meeting of the committee will be held in Yangon on February 7 to prepare a draft MoU that will be signed in Dhaka by March-end or early April, Aiyar said.

However, the Minister did not indicate any timeframe for the construction of the pipeline. "The pipeline construction, operation and maintenance will be taken by an international consortium," said Aiyar, adding that details would be worked out by the committee.


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