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Pipeline plans uncertain: India demands Burmese gas on the cheap

Siddique Islam
From Mizzima News, India
October 10, 2005
link to this article.

The proposed gas pipeline project from Burma to India has hit a snag after the Indian government told their Burmese counterparts they wanted the gas at lower-than-market rates.

Burma had intended to sell gas to India at the same rate placed on exports to Thailand but India continues to insist on lower prices. The Burmese government is reported to have turned down the request according to sources.

Burma sells gas to Thailand at $4.20 per cubic feet of gas (MCF). Sources said Burma had offered India the same rate but India insisted on $3.85. Burmese authorities have asked India to discuss the tariff with the pipeline project consortium, sources confirmed.

The argument over prices is a further snag in three-month negotiations that have already been strained over several issues, including Bangladesh.

Managing Director of the Mohona Holdings and initiator of the project, KB Ahmed has criticised comments made by Chairman and Managing Director of Gas Authority India Limited (GAIL), Prasantha Bannerjee, over Bangladesh's reluctance to have the proposed pipeline through their territory.

Bannerjee blamed Bangladesh for causing uncertainty during negotiations.

But Ahmed told Mizzima on Saturday in Dhaka, "I did not understand why he made such a comment."

Ahmed said while GAIL was a 10 percent shareholder of the A1 and A3 gas blocks in Burma the proposed pipeline was not the company's concern. According to analysts in Dhaka, India, after failing to convince Burma to sell their gas at a lower rate has launched a propaganda campaign against Bangladesh.

"India is trying to establish that Bangladesh is not giving the right of way," an analyst observed.

Burmese Energy Minister Brig-Gen Lun Thi made similar statements at the meeting of BIMSTEC energy ministers in New Delhi last week. But the Bangladeshi government made its position on the tri-nation pipeline project clear during Indian Petroleum Minister Mani Shankar Aiyar's visit to Dhaka last month.

Authorities in Dhaka said Bangladesh would allow the pipeline to run through the country in exchange for the Indian government allowing the transit of trade routes with Nepal and Bhutan through India.

But sources said Aiyar told Bangladesh Energy Advisor Mahmudur Rahman a decision would only be made after consultation within the Indian government. A month ahs passed with no word on the proposal.

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