Pipped to the post

Pipped to the post India has begun re-negotiating with Myanmar for the transfer of natural gas through Bangladesh, after China stole a march over it last year. A delegation of state-owned gail (India) Limited and ongc Videsh Limited was in Myanmar on May 2-3 to present options of several alternative pipelines. They will stay back for detailed discussions after the two-day official meeting.

India's geopolitical strategy took a beating when Myanmar signed a memorandum of understanding (mou) with China for supply of natural gas from its gas-rich A-1 and A-3 blocks in January 2006. India, officially, remained in the dark for months about the deal inked between PetroChina, China's state-owned oil and gas giant, and Myanmar, despite the fact that India had signed a tripartite agreement with Myanmar and Bangladesh in 2005 to transfer gas from the block via Bangladesh, Mizoram, and Tripura to West Bengal.

At stake is one of the biggest natural gas finds in south-east Asia and for India one of the two potential new sources of substantial energy, the other being the stop-start Iran pipeline. The A-1 block lies off the Western coast of Myanmar, in the Bay of Bengal, adjacent to the tribal Arakan region. It holds up to 20 trillion cubic feet (tcf) of gas. Upon this discovery, ongc Videsh bought a 20 per cent stake and gail a 10 per cent stake in the block. The South Korea-based Daewoo International Corporation holds the majority stake of 60 per cent and Korea Gas Corporation holds the remaining 10.


India worked out the shortest route for a terrestrial gas pipeline that would be about 800 km and run through Bangladesh, Mizoram and Tripura, named the Shwe gas pipeline project. But, Bangladesh quickly became India's bugbear, bargaining hard for trade-offs.

In return for letting the pipeline run through its territory Bangladesh asked India for three concessions: duty-free movement of goods through India, a re-view trade deficit that India enjoys against Bangladesh and transit rights to move energy from Nepal and Bhutan to Bangladesh. Hectic parleys began but India's Union ministry of external affairs decided that

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