Talks to explore possibility of India-Myanmar pipeline
From Reliance News, India
January 11, 2005
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New Delhi will hold talks with Dhaka and Yangon tomorrow to explore the possibility of laying a natural gas pipeline from Myanmar to India via Bangladesh.
"We are having a tripartite meeting of Energy Ministers from India, Bangladesh and Myanmar in Yangon on January 12 to see how gas from Myanmar could flow into India through an onland pipeline," Petroleum Minister Mani Shankar Aiyar, said before leaving for Yangon.
India, which last week struck a 25-year deal to import 7.5 million tonnes of liquefied natural gas (LNG) from Iran from 2009, is looking for more fuel as demand is expected to grow to 400 million standard cubic meters per day by 2025 from around 90 mmscmd available today. Domestic production meets only half the demand.
"The idea is to explore the possibility of Myanmar-India gas pipeline," he said.
The pipeline is one of the several options being considered by India to bring gas reserves from Shwe field in Block A-1 in offshore Myanmar, as well as volumes that are expected to be discovered in its adjacent block A-3.
In both blocks, ONGC Videsh Ltd. has 20 per cent stake and GAIL (India) 10 per cent. South Korea's Daewoo is the operator of both blocks.
Bangladesh will earn about 125 million dollars annually as transit fee for the pipeline, that would run through Arakan (Rakhine) state in Myanmar via Indian states of Mizoram and Tripura before crossing Bangladesh to Kolkata.
Sources said Dhaka had agreed in-principle to the export pipeline proposal and a tripartite deal could be reached this month.
Dhaka, however, wants the pipeline to be laid along Bangladesh's existing roads and highways and that the project be jointly managed by it and India. It also wants India to agree to allow Bangladesh to use the pipeline to export gas to India or import it from Myanmar.
India would build the 1 billion dollar 290-km gas trunk line while Bangladesh's state-owned Gas Transmission Company would have responsibility of managing the stretch in its country.
A three-billion dollar liquefied natural gas project to bring A-1 and A-3 gas was also under evaluation, sources said.
GAIL has commissioned Italian contractor Snamprogetti, to conduct a feasibility study for the LNG project.
An appraisal campaign recently started at Shwe, which has estimated recoverable reserves of between 4 trillion and 6 trillion cubic feet of gas. Reserve potential at the A-1 block is put at upto 24 Tcf.
First gas from A-1 block is expected in 2009, sources said.