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Myanmar pipeline MoU likely in Nov

Anupama Airy
From The Financial Express, India
September 7, 2005
link to this article.

The petroleum ministry is hopeful of signing the much-delayed trilateral memorandum of understanding (MoU) on the transnational gas pipeline project from Myanmar to India via Bangladesh by November-end.

A senior ministry official said the government was favourably considering Dhaka's proposal on giving it duty free access to the Indian markets as a least developed country (LDC).
Bangladesh's economy being export-led, India's support is seen as vital for its economic growth. Currently, duty-free access has been given to Dhaka for 90 items and the latter wants India to include ceramics, textiles besides some other items.

The other two issues raised by Dhaka relating to transit rights and power trade with Bhutan and Nepal are also being addressed at appropriate levels. India has categorically told Dhaka that it should not link any of these issues with that of the pipeline project.

"The recent visit of two senior ministers from India (external affairs and petroleum ministry) clearly indicates the seriousness with which we want to iron out the issues. Prime Minister Manmohan Singh met petroleum minister Mani Shankar Aiyar before his visit to Dhaka and asked him to speed up the process of bringing gas from Myanmar to India," the official said.

Mr Aiyar during his visit made it clear that Bangladesh should not link these issues with the pipeline project. "More than the energy corridor issue or the issue on trade rights, Dhaka is now insiting more on the $2 billion trade imbalance issue. The commerce ministry is already looking into this issue and Mr Aiyar would also be writing to his commerce ministry counterpart in this regard," the official said.

At the same time, India has also made it clear that it will simultaneously pursue other options in the event of Bangladesh not joining the pipeline project as "we are not willing to forego the gas from Myanmar", said the ministry official.

Gas from Myanmar is seen as vital for meeting India's energy security. Myanmar is keen to settle the issue of evacuation of gas from two fields in the Arakan region where Indian companies hold 30% stakes. Myanmar has been exerting pressure for an early decision, indicating there were other buyers for the gas, which is expected to become available from next year.

Keen to give some comfort level to Myanmar, Indian authorities are mulling various options including setting up a power plant near the border for transmission into the northeast and eastern parts of India.


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