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
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
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
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
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
Another of Essar's gas asset in Myanmar (Block L) has an
estimated recoverable hydrocarbon reserve of 330mn barrels of oil equivalent
Essar also has a onshore L block in Myanmar.
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
The Essar group holds the two Myanmar assets through an unlisted
entity—Essar Exploration & Production, South East Asia.