Pipeline through Bangladesh

Myanmar-China-Gas-Pipeline
India is all set to revive an old project to set up a gas pipeline from Myanmar western coast to eastern India through Bangladesh.

Indian commerce minister Anand Sharma, now leading a delegation to World Economic Forum’s East Asia Summit at Myanmar capital Nayphidaw (June 5-7), is going to raise the issue with Myanmar government during his stay in the country.

India gave up this project in 2004-5 when it failed to get Bangladesh to agree to allow the pipeline to be laid through Bangladesh.

The Myanmar government waited for two years but when it found India was not able to finalise the pipeline route, it okayed China’s Yunnan-Arakan pipeline that starts at the Arakanese coastal town of Kyaukpyu and ends at China’s Yunnan province.

Most of the prospective gas blocks on the Arakan coast were also bagged by the Chinese companies as the Myanmar military junta was keen on exploiting the gas reserves without much delay.

When Bangladesh did not okay the Indo-Myanmar pipeline, Delhi considered laying one through its troubled northeastern region to connect the Myanmar gas fields to West Bengal.

But it was abandoned as it was not found to be commercially viable and security concerns were also expressed.

Now with a friendly regime in Dhaka, India feels emboldened to revive the project again, not the least because it feels there is much economic gain for Bangladesh in it in shape of transit fees.

An Indian company, Essar has two very prospective blocks in Arakans which Delhi feels could be enough to keep the pipeline supplied.

In fact, India’s state-owned oil companies Indian Oil and Oil India are in talks with the Essar group to pick up 20% stake each in the gas blocks in Myanmar that is estimated to have even bigger reserves than Reliance Industries’ KG-D6 fields in southern India’s Cauvery basin.

The shallow-water gas block (A2) that Essar group had acquired in 2005 is an estimated 13 trillion cubic feet (tcf) gas reserve, larger than the 10.03 tcf KG-D6 fields.

“Both IOC and OIL are considering Essar’s farm-in proposals for A2-shallow water gas block and an onshore block L in Myanmar,” a consultant, advising the two companies said on condition of anonymity.

Another of Essar’s gas asset in Myanmar (Block L) has an estimated recoverable hydrocarbon reserve of 330mn barrels of oil equivalent (MMBOE).

Essar also has a onshore L block in Myanmar.

Confirming the development, a petroleum ministry official said, IOC and OIL have already visited Essar’s data room for due diligence.

“They are considering to jointly picking up 40% stake in Essar’s gas block, but not in the L block,” he said.

The Essar group holds the two Myanmar assets through an unlisted entity—Essar Exploration & Production, South East Asia.

Source: Bangladesh Chronicle