Indian refiners eye entry into Myanmar to supply auto fuel
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New Delhi: After making forays into Bangladesh and Nepal, Indian refiners are about to venture into Myanmar to supply auto fuel. At the same time, they are also consolidating their presence in their earlier South Asian markets. Later this year, Numaligarh Refinery Ltd in Assam will be the first off the block in selling petroleum products to Myanmar. “Supply of fuel will initially be by road and if the quantity required turns out to be huge, then it will make sense to invest in pipelines,” a person with direct knowledge of the matter said on condition of anonymity.
State-owned Indian Oil Corp. is also keen to start retailing operations in Myanmar for which it has submitted a proposal to the government of that country, the person said. Indian Oil is also preparing to expand its Nepal operations by opening 100 retail outlets in partnership with Nepal Oil Corp., a state-owned trading company. Besides, talks are on to extend the scope of an earlier planned pipeline between Raxaul in Bihar to Amlekhganj in eastern Nepal, the person said.
Oil minister Dharmendra Pradhan and Nepal’s minister for supplies Deepak Bohara discussed the possibility of expanding the proposed pipeline to connect Motihari in Bihar and Chitwan in Nepal when they met in the last week of March, said the person cited above.
The governments are also studying the possibility of two additional pipelines to transport liquefied petroleum gas (LPG) and natural gas.
During Bohara’s visit, Nepal renewed its fuel purchase deal with India for another five years. The Himalayan nation will buy 1.3 million tonnes of fuel from India every year during the period.
Indian Oil chairman B. Ashok told Mint in an interview published on 6 March that the company is working on expanding almost all of its existing refineries including the ones in the north-east. The move is part of the Make in India drive, and aimed at adding jobs in the refining and petrochemical sectors.
Earlier this week, India and Bangladesh agreed to increase energy cooperation which included business-to-business deals in the hydrocarbon sector. A $1 billion contract between Petronet LNG Ltd. and Bangladesh Oil, Gas and Mineral Corp., (Petrobangla) for use of Petronet’s LNG terminal and a $300 million deal between Reliance Power Ltd. and Petrobangla for setting up a 500 million standard cubic feet per day LNG terminal at Kutubdia island near Chittagong are among them.
A report by the Boston Consulting Group in 2016 titled Hydrocarbons to Fuel the Future noted that India’s refinery capacity addition witnessed a halt between the period 2012-2015, driven largely by project delays and that it was important the country regained its lost momentum in adding capacity to reinvigorate export potential. India has a 230 million tonne a year refining capacity.
“India has demonstrated technical capability and cost competitiveness in building and operating large refineries. It makes sense to invest in mega coastal refineries of high complexity to serve growing domestic demand and also to serve markets such as East Africa and Asia,” said Debasish Mishra, partner at Deloitte Touche Tohmatsu India LLP.