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Open to transit corridor for Myanmar gas

From India Times
December 9, 2004
link to this article.

This could be a major breakthrough in India's energy diplomacy. If initial talks are any indication, India could soon be working on a transit corridor through Bangladesh to import gas from Myanmar.

Petroleum minister Mani Shankar Aiyar, who had initiated a proposal to this effect, met the visiting finance and planning minister of Bangladesh, Saifur Rahman, in the capital on Tuesday. Bangladesh has indicated that it is open to a tripartite agreement with Myanmar and India to explore the possibilities of bringing in gas to India.

A pipeline through the eastern corridor is expected to bring in the much required gas for the eastern region in India. This comes at a time when India is discussing possibilities of getting into a back-to-back bilateral agreement with Iran to import natural gas at its border.

Bangladesh, which has huge deposits of natural gas, has till now stayed away from a direct dialogue on trading gas with India. Aiyar will be a member of the visiting delegation to Dhaka early January 2005, to participate in the Saarc summit.

With Bangladesh now willing to explore the possibilities of entering into a tripartite agreement, Aiyar is expected to follow up his Dhaka visit with official talks in Yangoon soon after. Sources say that Bangladesh is expected to join in the Yangoon meeting.

For India, which has been making an effort to import gas from the west coast, the proposed eastern corridor could open up new sources of energy and gas. As of now, OVL has a 20% interest supported with 10% stake by GAIL in two offshore blocks A-1 and A3 in Myanmar.

The other consortium partners are Daewoo and KOGAS Block A-1 extends over an area of about 3,885 sq km off Myanmars Rakhine Coast, close to Bangladesh.

The pipeline is one of the several options being considered by India to bring gas from the offshore fields in Myanmar. Sources say that India could explore possibilities of a participating interest in building the 290-km gas trunkline.

Bangladesh state-owned Gas Transmission Company is expected to be responsible for managing the stretch in its country.

Although no official figures are available, sources say the pipeline could involve an investment of about $1bn. Also, Bangladesh by offering the transit corridor could earn about $125m annually as transit fee for the pipeline, that would run through Arakan (Rakhine) state in Myanmar to the Mizoram and Tripura in India before crossing Bangladesh to Kolkata.


Unocal shadow on gas import plan

Telegraph India
December 7, 2004
link to this article.

It has now become increasingly evident that serious differences between US' Unocal and the Bangladesh companies seem to be at the heart of the matter which led to several futile rounds of talks by Indian companies such as Gail to import natural gas.

This clearly shows a conflict of interest between a multinational company that wants to rake in quick returns from its investment and the host government that has the larger economic welfare of the people in mind.

Bangladesh finance and planning minister M. Saifur Rahman said today there was "no certainty about the domestic availability of the gas" and so Dhaka could not commit itself to exporting it to India.

Unocal, on the other hand, has been repeatedly telling Indian companies that there was plenty of surplus natural gas in the field that it had discovered in Bangladesh and there was a great opportunity to buy it.

In fact, Unocal had roped in Gail for laying a pipeline from the Bangladesh border to Indian consumers. Gail had even chalked out a blueprint and worked out finances.

The US company played a crucial role in assuring India that the gas would come through and it was only for political reasons that it was being held up. However, the Bangladesh authorities have been citing the economic rationale of lack of surplus quantity that is preventing it from exporting the gas.

Bangladesh's readiness to allow the proposed Myanmar-India pipeline through its territory for a fee shows that its politics does not come in the way of its economics.

A Gail team has also just returned from Bangladesh after holding successful discussions with Bangladeshi companies - Petrobangla, Gas Transmission Company and Titas Gas - for providing energy management services in pipelines and CNG processing.

The fact that Bangladesh is ready to accept Gail's co-operation also seems to suggest that the country does not have anything to conceal on its gas reserves.

A Gail official said the company had offered these energy management services "on a cost-sharing basis".

Similarly, Bangladesh hopes to rake in $100-200 million as fee for allowing the Myanmar-India pipeline to run through its terrain and is willing to maintain it.

Since laying a pipeline on the land route through Bangladesh is much cheaper than the sea route and India has access to large reserves of gas in Myanmar, the proposal is a highly feasible one. The Bangladesh minister said the two countries must come together on a higher plane to give economic co-operation a greater momentum.


Dhaka to tag strings to allowing gas pipeline

From The Daily Star, Bangladesh
December 4, 2004
link to this article.

Bangladesh will allow a proposed tri-nation gas pipeline to be drawn from Myanmar through its territory if India lets Bangladesh use its land to transit goods to and from Nepal and removes barriers to trade between the two countries.

Finance and Planning Minister M Saifur Rahman will make this position clear to the Indian officials if Delhi raises the proposal for transit of the gas pipeline during talks, he told reporters at Zia International Airport yesterday prior to flying off to the Indian capital.

He said he had talks with the prime minister on the issue.

The proposed pipeline will transmit gas from Myanmar to Tripura, from where gas will join the pipeline flow and continue on to eastern Bangladesh through the Brahmanbaria border, exiting in western Bangladesh through the Jessore border and ending in West Bengal.

"We are not against such a proposal in principle, the issue has been discussed with the prime minister and I can say that we do not have a negative attitude towards the issue," the finance minister told journalists.

He, however, said both India and Bangladesh will benefit if negotiations on transit for gas pipeline take place under a comprehensive framework.

Saifur said there should be no reservations about with the proposed gas pipeline since many countries have such arrangements. For instance, he pointed out, oil from Iran is being exported through pipeline going through Iraq, Syria and Turkey, while Russia is exporting gas pipelined through Italy, France and several other countries.

The issue needs to be seen in the light of historic relations between India and Bangladesh. Delhi should remove tariff, non-tariff and administrative hurdles to help Dhaka close a huge trade deficit with it. India should also provide Bangladesh transit facilities to carry goods to Nepal, an issue that Dhaka has been pressing for long, Saifur observed.

"Discussions have to take place on the basis of these interrelated issues," he maintained.

Saifur will attend a three-day India Economic Summit co-organised by World Economic Forum and Confederation of Indian Industry, beginning tomorrow, where he will speak on the subject "Creating a Dynamic South Asian Region."

He will meet his Indian counterpart Palaniappan Chidambaram, External Affairs Minister Natwar Singh, Petroleum Minister Mani Shankar Aiyar, Commerce Minister Kamal Nath, Agriculture Minister Sharad Pawar and Tata Group Chairman Ratan Tata.

He is likely to call on Prime Minister Manmohan Singh and will meet former prime ministers Inder Kumar Gujral and Atal Bihari Vajpayee. India's National Security Adviser JN Dixit will call on Saifur at his hotel suite during his five-day trip.

"We want to improve relations with our neighbours with a fresh, liberal mindset and I will have talks on ways to further boosting ties between the two countries. Europe is marching ahead with a similar attitude... Leaders of the Saarc nations need to work collectively burying past mindset," the finance minister said when asked what this India trip is all about.

This is Saifur's maiden trip to India after the Congress-led government came to office in May this year.

On Bangladesh's having a free trade area (FTA) with India, he said since leaders of seven Saarc countries have agreed to put in place a South Asian Free Trade Area (Safta) in 2006, there is no need to have such a bilateral trade arrangement.

"It will be tantamount to degrading Safta if we go for a bilateral FTA now."

Asked if Safta or FTA will help Bangladesh to reduce the bilateral trade gap now heavily in favour of India, Saifur said it will not happen automatically. Bangladesh will have to raise the number of its exportable items and make them cost competitive on the one hand and India will have to liberalise its trade regime on the other.

Indian Petroleum Minister Mani Shankar Aiyar is expected to push hard for a pipeline to carry natural gas from Myanmar through Bangladesh to India when he comes to Dhaka during the 13th Saarc Summit.

The Cabinet Committee on Economic Affairs last week shelved the gas pipeline proposal, saying it requires a 'high-level discussion' since it has implications on national security and inter-country relations.


Dhaka defers support to Indo-Burma gas pipeline

Nava Thakuria
From Mizzima News, India
December 3, 2004
link to this article.

Bad news for the concerned sections regarding the energy security of India after Bangladesh government has decided to defer its support for the three-nation natural gas pipeline from Burma to India thorough Bangladesh.

The Bangladesh Cabinet Committee on Economic Affairs has advocated for taking up the matter at the highest level. The committee was of the view that the decision regarding the gas pipeline should be dealt by the Prime Minister Khaleda Zias office, which also looks after energy issues of Bangladesh.

The gas pipeline project will be shared between India and Burma, where a Bangladeshi company, Mohona Holdings is also a recognized stack holder.

The US dollar one billion project is planned to export natural gas from Burma's Arakan State to India through a pipeline which passes through Bangladesh. Even the natural gas from Northeastern province of Tripura is also on the card to be fed into the pipeline.

The Indian government had tried their best to import gas from Bangladesh for long back, but due to the domestic opposition to the Indian proposal in Bangladesh, it had not been materialized.

The energy experts as well as civil society in Bangladesh are vehemently opposing the idea of gas export to India. The issue has got political complication too.

Now, the government of India has been pursuing for importing gas from Burma. New Delhi has argued that it will benefit both India and Burma. At the same time, the project will be beneficial for Bangladesh too in revenue generation. It is predicted that the Mohona Holdings Ltd. of Bangladesh can earn around $100 million per year through the project.

The Burmese pro-democracy and ethnic Arakan activists say that they strongly oppose the Burmese government selling the natural gas to India.

They argue that the money the junta gets from Arakan gas export will strengthen the rule of military government in Burma.

"The people in Arakan State will never be benefited from this gas sale. Instead, they will be subjected to severe human rights violations such as forced labor and forced relocation by the military authorities for building gas pipeline", said Kyaw Han, an Arakan ethnic leader who has been campaigning against the gas pipeline.

The previous Sheikh Hasina-led Awami League government in Dhaka was almost ready to support the gas pipeline project. The proposal was first submitted in 1996 to Dhaka, but the then Prime Minister Sheikh Hasina, known as pro-India prime minister, could not materialize the support from other political parties.

Later, Mohoma Holdings Ltd. submitted the proposal once again to Dhaka, after the government change in 2002 in Bangladesh. Though it showed interest in the beginning, the present Bangladesh Nationalist Party-led government, later deferred the decision.

"This In fact the issue is expected to top the agenda at the tri-nation energy ministers conference to be held in January 2005 in Burma, informed MK Roy, a Dhaka based senior journalist, who deals with the economic issues of Bangladesh.



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