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India, Bangladesh agree on tri-nation gas pipeline

From Reuter
September 5, 2005
link to this article.

Bangladesh and India on Monday agreed in principle on a tri-nation gas pipeline project, allowing India to bring natural gas from Myanmar and Bangladesh to increase trade with landlocked Bhutan and Nepal.

Under the project, India will build a 290-km pipeline through Bangladesh to connect offshore gas fields in Myanmar to Indian states, officials said.

They said the initial agreement came at a meeting between Indian Petroleum Minister Mani Shankar Aiyar and Bangladesh's energy adviser Mahmudur Rahman.

Aiyar flew to Dhaka on Monday, on a two-day visit, despite his broken leg, on a wheelchair.

"I am satisfied as the Indian petroleum minister was very much positive about all issues that came up during our discussion," Rahman told reporters after the meeting.

"Our discussion was very constructive and we tried to know each other," Aiyar said. "Discussion will continue," he added.

Rahman said the agreement needed further review before being sealed and would include transmission of power generated at hydroplants in Bhutan and Nepal across India's grid to Bangladesh.

"Bangladesh has also proposed a corridor (through India) to transport goods to Nepal as well as to bring in hydro electricity from Nepal and Bhutan," Rahman said.

"Besides, Bangladesh has urged India to narrow the huge trade gap between India and Bangladesh," Rahman added.

Bangladesh imports $1.8 billion worth of Indian products while India imported about $144.19 million from Bangladesh in 2004-05 (July-June) fiscal period, officials said.

In January, Bangladesh, India and Myanmar agreed to finalise soon details of the gas pipeline project, which would cost more than $1 billion.

But work on the project has been delayed due to differences between Dhaka and New Delhi over the trade and corridor issues.

The proposed pipeline will enter Bangladesh through its eastern Brahmanbaria border from the Indian territory of Tripura and cross into West Bengal through northern Rajshahi border.

If the plan is implemented, about $350 million will be invested in Bangladesh and the country will get nearly $100 million as carrier fee per year, energy officials said.

Bangladesh will also get another $100 million as one-off "right of way" charge from this project and $25 million each year for sharing in its management, the officials said.


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