May 6, 2011

India, Bangladesh, and Myanmar push for an agreement over gas pipeline

Bilateral talks are underway over gas sales from Myanmar to energy-hungry Bangladesh, with an advisor to the Hasina government hopeful that a deal could be aided by the reinvigoration of a proposed tri-nation gas pipeline with India.

The pipeline, first mooted by India in 2004, would in theory carry Myanmar gas through Bangladesh to India. Conflicting statements about Myanmar’s willingness to sell gas to Dhaka have persisted, with bilateral relations often rocky – the two nations were involved in a spat over maritime boundaries and rights to gas block in the Bay of Bengal, although things appear to have improved in the past six months.

India had initially proposed to pay for the costs of building the 1000km pipeline but lost out to China. According to a 2007 cable released by Wikileaks, Mohan Kumar from India’s foreign ministry said that “there is not enough gas for both India and China”, and that “China is going to get it [the gas]”.

This was corroborated by a former Bangladeshi government advisor in 2008, who was quoted saying that “Lun Thi [Myanmar's former energy minister] informed us that Myanmar does not have enough gas now for supply to Bangladesh as it has made agreements with China and Thailand for gas supply from the existing reserve.”

Since then however both countries have elected new governments. While Myanmar’s is perhaps only in name, Bangladesh has seen the switch from a military caretaker government to Sheikh Hasina’s Awami League party.

Hasina has worked hard on bilateral relations with both Myanmar and, crucially, India. India has had a fractious relationship with previous Bangladeshi administrations, but since Hasina’s rise to office, multilateral infrastructure projects such as this have now made ground, if not yet broken it.

In the past the Bangladeshis refused access to Indian freight travelling to their isolated northeast, but in this instance Bangladesh not only has a warmer relationship with India, but a genuine incentive: the Awami League has made an election promise to have an electricity generating capacity of 7,000 MW by 2013, a goal considered beatable through both domestic gas exploration, new coal plants and imports of gas from Myanmar and Russia’s Gazprom.

Furthermore, Myanmar’s gas reserves may have been given a boost with the government’s recent assessment that it had nearly 90 trillion cubic feet of gas. Moreover, it announced last week that it would explore for shale in eastern Karen state.

Although shale is more expensive to exploit than conventional natural gas, the US Energy Information Agency (EIA) recently announced that the world’s gas reserves could be estimated upwards by some 40 percent if one takes into account the exploitation of shale gas.

Following the appointment of a new ambassador to the country, U Min Lwin, it was reported in the Bangladeshi press that “The Ambassador appreciated the government of Bangladesh as it has been playing very positive role recently in the international relations”. Such positive spin now appears a prerequisite for countries eyeing a stake in Myanmar’s lucrative extractive industries.

Source: DVB

 
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