Narinjara News

“The Independent”, Dhaka, Bangladesh,

Sunday 06 June 2004  / Issue: 2053

Dhaka sets terms for Myanmar-Bangladesh-India gas pipeline project

Shahnaj Begum &UNB

The Ministry of Energy and Mineral Resources proposes to revive the Myanmar-Bangladesh-India gas pipeline project.

Sources said the proposed pipeline will enter the Bangladesh border through Brahmanbaria from the Indian territory of Tripura and will cross into West Bengal through Rajshahi border.

The government has, however, put certain conditions like import of gas from Myanmar when required for allowing the gas pipeline from Myanmar to West Bengal over Bangladesh territory.

Bangladesh also suggested other conditions including a provision for transmission of its own gas domestically or for export, if required, and empowering Gas Transmission Company Limited (GTCL), a company under state-run Petrobangla, with responsibility for the management of the proposed pipeline.

Besides, the government will decide on the diameter of the pipeline that will go alongside highways as much as possible to ensure that not much land is acquired for the pipeline.

Mohona Holding, a local company, has requested the Ministry of Energy to reconsider the proposal which was rejected by the Prime Minister's Office (PMO) last year.

Mohona, recently again showed interest in this $1billion project. The proposal also claims to add gas to its pipeline from India's Tripura region, where large-scale gas production remained uncertain for years due to insurgency.

Energy Ministry sources said this time the proposal would be placed before the cabinet committee on Economic Affairs first.

According to a report The Hindu, published in the Indian newspaper, Foreign Minister Morshed Khan discussed the issue when he visited India last week. “We’re looking at the potential for larger cooperation (with India) as our requirement is going up,” the report quoted Khan as saying on Tuesday. “I’ll leave it to the officials to discuss import contracts.”

India’s Oil Minister raised the idea of India using Bangladesh as a transit route to transport natural gas from Myanmar, the report said. Khan said Dhaka had no objection if the pipeline could be built on mutually beneficial terms with Bangladesh levying a transit fee. But this could make Myanmar gas expensive for India, the report said.

It may be mentioned that day before yesterday India offered to raise diesel oil exports to help Bangladesh ease a 2.3-million-tonne shortfall. India’s offer to sell 60,000 tonnes of diesel a month from next year was made by India’s Oil Minister Mani Shankar Aiyer at a meeting with the visiting Bangladeshi Foreign Minister.

Sources said the proposal was made in mid-'99, coinciding with US company Unocal's unofficial advocacy for gas export from Bangladesh to India and a visit by the-then Foreign Minister of Myanmar to Bangladesh. The company has not furnished detailed information as to how it would organise funds for the project. If the project is finally approved by the government, the source said, a consortium will have to be set up to implement it within Bangladesh territory. Sources said that the ministry did not as yet have adequate background information about the company and its technical and financial competence to undertake such a huge project covering three countries.

"The present proposal would not cause any harm to the country," AKM Mosharrof Hossain, the State Minister for Energy and Mineral Resources, told The Independent yesterday. He said and added that the country would benefit from royalty, installation and other transmission charges.

He also said that one of the conditions raised earlier was that Bangladesh would be the sole operator of the pipeline and would be entitled to use it as and when necessary in its own interests, including export and import of gas whenever needed.

Other terms and conditions include provisions requiring the company to construct the pipeline with 30 to 40 inch diameter and to include the Bangladesh Petroleum Corporation (BPC) as one of the main parties in the consortium.

Officials at the Energy Division indicated that Bangladesh would get about US$ 125 million annually US$ 100 million as wheeling charge and US$ 25 million as maintenance charges from the proposed pipelines. Besides, Dhaka would get right of way revenue from the pipeline.

On top of that there would be an investment of US$ 150 million that would create employment for Bangladeshis.