Bangladesh has lifted its opposition to a gas pipeline linking India and Myanmar and running through its territory, paving the way for the establishment of a regional gas grid that will feed India’s growing energy hunger.
The approval by Bangladeshi Prime Minister Sheikh Hasina Wajed’s government comes as two other such pipeline projects involving India have become entangled in geopolitical knots.
Bangladesh’s change of stance follows the ouster of the Begum Khaleda Zia regime, which has been succeeded by an administration friendlier to India. The neighbouring nation had been stonewalling the 900km pipeline, which will originate in Myanmar and pass through Bangladesh to India.
The assent was communicated to India during power secretary H.S. Brahma’s visit to Bangladesh last month, which followed Sheikh Hasina’s state visit in January.
“The energy adviser to the prime minister of Bangladesh, Tawfiq-e-Elahi Chowdhury, communicated its (Bangladesh’s) willingness to be part of the pipeline project,” Brahma told Mint.
“We have to see what amount of gas reserves we are talking about. I am going to forward our report to MEA (ministry of external affairs),” he added.
Questions emailed to the embassy of Myanmar and Bangladesh’s high commission in New Delhi bounced back, while repeated attempts to contact the embassy and high commission yielded no results.
India has been seeking gas supplies from Myanmar and Bangladesh, both of which have significant reserves of the fuel.
Myanmar has gas reserves of 89.72 trillion cu. ft, of which 18.01 trillion cu. ft can be easily extracted. Bangladesh, on the other hand, has resisted calls until now for the export of natural gas—of which it has substantial reserves of 135.8 billion cu. m—to its larger neighbour, which needs supplies of the fuel for its projects.
India has recoverable natural gas reserves of 119.55 billion cu. m and produced 32,847 million cu. m in 2008-09.
“If the tri-nation pipeline happens, then there is a very strong possibility of the creation of a sub-regional gas grid,” said Anish De, chief executive at Mercados Asia, an energy consulting firm. “This is a huge statement and if carried out, will have massive social, political and economic ramifications.”
While India has been trying to get gas from blocks in Myanmar in which ONGC Videsh Ltd (OVL), the overseas arm of oil and gas explorer Oil and Natural Gas Corp. Ltd, and gas distributor GAIL (India) Ltd together hold a 30% stake, that country has decided to sell the fuel from the areas to China.
India’s cabinet committee on economic affairs in February approved the OVL and GAIL proposal to take stakes of 8.35% and 4.17%, respectively, in the pipeline being constructed by China National Petroleum Corp. (CNPC) to transport gas from the offshore blocks A-1 and A-3 to China.
This comes as Indian state-owned firms such as OVL are locked in fierce competition for energy assets with Chinese rivals including CNPC, Sinopec Corp. and China National Offshore Oil Corp. Ltd.
India was able to conclude several deals with Bangladesh and Myanmar in February.
State-owned NHPC Ltd signed an agreement with India’s ministry of external affairs last month to fund hydrological studies needed to develop the 1,200MW Tamanti hydroelectric power plant and a 642MW project on the Chindwin river, the largest tributary of the Irrawaddy, Myanmar’s key commercial waterway.
The Indian government last December also sanctioned a new 100km highway from Mizoram to the Myanmar border that would provide a road link to the Sittwe port in Myanmar that India is developing.
Bangladesh plans to set up two coal-fuelled power projects of 1,320MW each, one of which requiring an investment of around Rs6,600 crore will be offered to state-owned NTPC Ltd, India’s largest power generation utility, to be developed in a joint venture with the Bangladesh Power Development Board. NTPC is also scouting for renovation and modernization and operation and maintenance opportunities in Bangladesh. In addition, a 250MW transmission interconnection between India and Bangladesh is being set up by Power Grid Corp. of India Ltd.