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Tri-nation gas pipeline-Negotiations for int'l consortium begin

News from Bangladesh
25 May, 2005
link to this article.

A local private company, Mohona Holdings Ltd, has begun negotiations with potential investors from private and public sectors and financial institutions to set up an international consortium for financing the planned tri-nation Myanmar-Bangladesh-India gas pipeline project.

Though the government is yet to give green signal to go ahead with the project, the company has already started negotiations for its financial package with some Indian and Korean firms, it is learnt.

"It's confidential at this point of time... We have started negotiations and we'll let you know later who're joining the consortium," AB Ahmed, Managing Director of Mohona Holdings Ltd (MHL), told reporters at a local hotel yesterday. Ahmed said that his company was working as facilitator to the pipeline project.

Ahmed said the gas pipeline project, a public and private sector venture, will be funded by an international consortium. The international consortium will build, own and operate some 897 kms of pipeline covering 289 kms in Bangladesh territory. The cost is estimated at US$ 974 million, he said.

Ahmed said the project is the brainchild of a Bangladeshi and if it is materialised than the three nations will be benefited equally

Ahmed told the journalists that if the pipeline is drawn through Bangladesh it would require an investment of US$ 350-600 million for Bangladesh portion.

Replying to a question whether they know about the conditionalities set by Bangladesh to India for installing the pipeline through Bangladesh territory, he said, "these are the matters which Dhaka and New Delhi are discussing to reach an agreement".

This project is a commercially viable one and it needs to be implemented for the benefit of all the three countries, KB Ahmed said.

Chairman of the Mohona Holdings Dr Mizanur Rahman Shelly also spoke on the occasion. Maj Gen Ruhul Alam Chowdhury, Shamsul Alam, Khalilur Rahman Chowdhury and Pervin Ahmed were present.

The pipeline would cost about US$ 974 million. Taking into consideration the cost of developing gas fields in the offshore waters, the total project cost including gas flow to the pipeline will be about US$ 1.3 billion.

KB Ahmed also said about US$ 600 million investment will come to Bangladesh as cost of the pipeline construction, while the country will receive another US$ 100 million annually as wheeling charge and US$ 24 million service charge for payment to GTCL for gas transmission.

He said according to their proposal the gas pipeline may run from Myanmar to Mezoram and Tripura and enter Bangladesh at Brahmanbaria point.

"It may also come through Teknaf and run along the coast of Feni to Brahmanbaria to take gas from Tripura. In the Bangladesh portion, it will cross the river Jamuna and pass through Jessore to enter West Bengal at Bongaon point," he added.

Another option is that it will enter Bangladesh at Teknaf along the coast to Feni through Brahmanbaria where a spur line from Tripura can be connected with the gas fields of Tripura. The crossing of Jamuna River to Jessore and Bongaon segment will remain unchanged, he said.

Ahmed hoped the bilateral trade issues between India and Bangladesh relating to the gas pipeline project will be ultimately resolved to everybody's satisfaction. "The three nations would soon sign an MOU to this effect", he hoped

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