Myanmar-Bangladesh-India gas pipeline

Independent-Bangladesh - (27-12-2002)

http://www.burmalibrary.org/TinKyi/archives/2002-12/msg00038.html

The subject needs a closer look

Brig Gen (retd) Sakhawat Hussain

It has been observed that whenever the issue of our gas export comes it is always considered that export should be made through pipeline. Considering the geopolitical scenario obtaining in the north-eastern region of India the people have got some serious misgivings and fear about gas pipeline. The common citizens have the right to know whether there is any alternative to pipeline and if so what would be the size of cost involvement. This important disclosure can dispel doubts, misgivings, misunderstandings and confusions. Very recently The Independent published a detailed report on a proposal for Myanmar-Bangladesh-India gas pipeline, a 1 billion dollar project. Interestingly the proposal coincides with the issue of exportation of Bangladesh gas through a separate pipeline to India. A couple of years back the increasing demand of Indian energy market had forced Delhi to look for cheaper alternative sources in countries likes Bangladesh and Myanmar. Coincidentally, favourable for India, that Unocal, the prim-mover of Bangladesh gas export, holds its bigger stake in exportable quantity of gas in Bangladesh and it partnered with neighbouring Myanmar's state owned company. The US Company had to withdraw its investment by selling off its share to MOGC (Myanmar Oil and Gas Company) under pressure from Clinton administration, yet the IOC is in favourable terms with Myanmar authority.

Under increasing domestic pressure the then US President Clinton had to enact presidential ban on further US investment in Myanmar on the ground of human rights abuse by the ruling military regime. Unocal then operating Yadana natural gas field off shore Myanmar with more than 5 tcf world class gas ready for export. The company also faced couple of lawsuits in the US on alleged human rights violation while constructing 1.5 billion dollar pipeline up to Thailand.

Incidentally, the proposal that was submitted by Unocal Bangladesh to Petrobangla for export of gas targets the same market i.e. North India. Before we discuss the Myanmar-India pipeline it would not be out of context to discuss in brief the Unocal proposal to Bangladesh government. The project named Bangladesh Natural Gas Pipeline Project (BNGPP) is targeted to export 500 million cubic meters per day for 20 years. The experts in Bangladesh are yet to be specific as regards the exact reserve that the country has. The conservative estimate is 12-15 Tcf proven reserve in 4 large fields that are considered to be economically viable. Meanwhile Unocal had obtained "letter of intentions" (LOIs) from prospective buyers in India. The report insisted that Bangladesh government must take quick decision to seize the "window of opportunity" that now exists in Indian market. Many analysts felt that the IOC was using pressure tactics on Bangladesh government. Would the latest move create more pressure on the pro-export lobby within the government? One has to wait for that result.

However, as reported earlier, Delhi has concluded gas import agreement with Myanmar for North Indian market and the shortest route possible for the market would be through Bangladesh, connecting the proposed Habiganj-India pipeline. Unocal that had 31 percent of share in a joint venture with Total of France, that had 28 percent stock, have already completed the pipeline from Myanmar's Yadana field, 70 kilometres off the Andaman Sea. The project aimed to carry natural gas to Thailand for 2,800-megawatt capacity power plant operated by Electric Generating Authority of Thailand at Ratchbury. Remaining share was owned by Myanmar Oil and Gas Enterprise (MOGE).

Total (French oil company) withdrew under pressure selling their stock to Unocal and in 1998 while withdrawing its commitment after US embargo Unocal sold the entire share to MOGE. The project was completed with estimates cost of 1.2 billion dollars. Along with other fields Yadana has surplus gas to be sold to India that needs safer, shorter and secured route to the mainland India. Thus Delhi funds the export proposal safer to use Bangladesh as the probable India-Myanmar pipeline corridor as North-eastern States of India are in a state of ceaseless insurgency. Though Delhi is in a reconciliatory mood to negotiate with separatist NSCNL (National Socialist Council of Nagaland) leader Muhiva but it is hard to predict the outcome. Naga insurgency is 54 years old that influences insurgency movement elsewhere. The route suggested reduces distance around Bangladesh through Indian territories to a larger extend that would reduce the total expenditure of the project.

Unocal Bangladesh, thus exerting pressure on its recommended sale of gas through pipeline that would ultimately facilitate joining with Indo-Myanmar pipeline as and when needed. In such event of the paramount question of the security of the pipeline, Bangladesh portion needs a closer look, notwithstanding the implied far- reaching strategic consequences that the arrangement may associate. One has to take all aspects into account especially in a region where mistrust is hard to be wished away.

Meanwhile, according to an agency report, to construct Myanmar-Bangladesh-India natural gas pipeline an international consortiumproposes to set up a gas pipeline over Bangladesh connecting Myanmar with the Indian states of Tripura and West Bengal. Sources said the Indian Energy Ministry had put forward the proposal of "Trans Myanmar-Bangladesh Gas Pipeline" to Bangladesh Prime Minister for getting her approval in principle. It was said to have been discussed with Indian National Security Adviser, Brijesh Mishara when he made a low profile visit soon after the present government in Bangladesh was installed. The consortium claimed that it had already got 'no objection' letters for the proposed gas pipeline from the governments of Myanmar and India as well as those of Tripura and West Bengal. According to the proposal Bangladesh government would not make any investment in pipeline construction. The entire investment would be met from foreign private sources, including payment for land acquisition. Land acquisition and the compensation may give rise to social economic problems in already shrinking arable land in a thickly populated country like Bangladesh. Be it as it may, Gas Transmission Company Limited (GTCL), a subsidiary of Petrobangla, has been proposed as the authority for inspecting pipeline construction and maintenance that will bring foreign exchange.

The said report published in a leading Indian daily further adds that "it categorically states that the proposed line would not be an alternative orcompetitor to the proposal of gas pipeline between Bangladesh and India of Unocal or any other international oil company. The proposed Trans-Myanmar-Bangladesh gas pipeline would also not be connected with any local gas field, but it could be used in future if gas import seemed to be necessary for the country. If the pipeline is constructed, Bangladesh would also get a gas line connection up to Thailand". The news item titled " Myanmar gas for India through Bangladesh" was published on 18, 2002.

As discussed, Unocal is the largest investor and main operative in Myanmar. The company had to face two law suit in the district court of California for alleged human rights violation and environment pillage while constructing the pipeline. A serious charge was brought against the company alleging that Unocal resorted to bonded labour, the charge that was denied by the company lawyer. The charge also mentioned forceful eviction of villagers without adequate compensation en route the pipeline to Thailand. The lawsuit had embarrassed the leading IOCs around the world.

It may not be out of place to mention that it was Unocal that entered into Central Asia in almost the corresponding year of re-entry into Bangladesh and Myanmar. Unocal's entry into Central Asia was not smooth; it had to compete with Argentinean Company Birdas in Afghanistan. Unocal- Birdas tussle over Trans Afghan Pipeline (TAP) is now part of the turbulent history of Central Asian Oil and Gas Pipeline Project, Centgas. The tussle saw the culmination of Taliban regime in Afghanistan and un-ceremonial exit of Birdas from the TAP race. The project remains dormant now. Many analysts of international repute are of the opinion that it was Central Asian natural resources that brought the misery that many are still going through.

All said and done, it seems that Bangladesh would soon enter into international energy diplomacy, that is now in the focus elsewhere in Central and South Asia. The aim of this article is not what Bangladesh government should do on the question of gas export but is to discuss the regional scenario on the issue of gas and oil that is now taking the center stage world over. The government of Bangladesh must weigh all pros and cons, that includes the security environment now prevailing in South Asia, before taking any decision on the issue of gas export.

It has been observed that whenever the question of gas export comes it is always considered that export should be made through pipeline. Considering the geopolitical scenario obtaining in the north-eastern region of India the people have got some serious misgivings and fear about gas pipeline. The common citizens have the right to know whether there is any alternative to pipeline and if so what would be the size of cost involvement. This important disclosure can dispel doubts, misgivings, misunderstandings and confusions If that decision is in favour of export, then the cause of the difference of views amongst the national and foreign experts, about reserve position should be, or else a gap between the government and the people would be created.

Again, the question of keeping a portion of it for own consumption does not arise unless the actual reserve position is known. What is surprising is that our national experts and the experts who like us to believe that gas reserve in Bangladesh is abundant and as such the country should immediately opt for exporting gas greatly differ about the actual reserve position. Two committees set up by the government recently, one for assessment and the other for utilization of natural gas, submitted their reports. According to the report of the assessment committee the actual gas reserve is far less than what is estimated by the experts working for the International Oil Companies.