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India finds gas and friends to the
east
By Sudha Ramachandran
BANGALORE - Close on the heels of a
multi-billion dollar deal for supply of liquefied
natural gas (LNG) from Iran, India last week
reached agreement in principle with Myanmar and
Bangladesh on the construction and operation of a
pipeline that will bring natural gas from Myanmar
to India via Bangladesh.
The pipeline,
which is likely to cost over a billion dollars,
will carry natural gas from the Shwe fields in
Myanmar's Rakhine or Arakan state, through the
Indian states of Mizoram and Tripura, then into
Bangladesh before finally crossing back into
India, all the way up to Kolkata. The pipeline is
one of the several options that India is
considering to bring gas reserves from Shwe field
in Block A-1 in offshore Myanmar, as well as
volumes that are expected to be discovered in
adjacent Block A-3. ONGC Videsh Ltd (OVL), the
overseas arm of India's Oil and Natural Gas
Corporation (ONGC), and the Gas Authority of India
Ltd (GAIL), India's largest gas transmission and
marketing company, together hold a 30% stake in
A-1 offshore Myanmar block, which is estimated to
hold gas reserves of 12-20 trillion cubic feet.
Of all the pipeline options to bring
Myanmar's natural gas to India, the overland
option via Bangladesh is said to be the most
economical. Hence Delhi's determination to see it
through. However, progress in taking forward this
option has been very slow, blocked by Bangladesh's
reluctance to allow this pipeline to run through
its territory.
Dhaka's reluctance stemmed
from its strategy to get India to concede its
long-standing demands on certain bilateral transit
and trade issues in return for allowing the
pipeline to run through Bangladesh. During his
visit to Delhi in December 2004, Bangladesh
Finance and Planning Minister M Saifur Rahman
insisted that Bangladesh would allow the gas
pipeline to run through his country if India would
permit a transit land route to Nepal through its
territory and allow his country to access
hydroelectric power from Bhutan and Bangladesh
through Indian territory.
At last week's
meeting in Yangon too, Bangladesh apparently
insisted on linking the pipeline to its trade and
transit demands of India. It wanted these
questions to be mentioned in the trilateral
statement. What appears to have finally clinched
the deal was a compromise that provided for a
trilateral statement that encouraged the
governments to pursue bilaterally "those issues of
bilateral cooperation which impinge on their
trilateral cooperation, such as hydroelectricity
and other diversified sources of energy supply,
trade and transit".
Besides, a separate
bilateral statement was agreed on that took note
of Bangladesh's specific concerns and India's
assurances to examine these in a positive manner.
It provides for granting Bangladesh access to the
low-cost hydroelectricity of Nepal and Bhutan,
using India's power grid and a trade corridor to
the Himalayan kingdoms through Indian territory.
Besides, it will also provide for measures to
reduce the trade imbalance between the two
countries. India's Petroleum Minister Mani Shankar
Aiyar said that India would "favorably" examine
Bangladesh's request for transit rights to Bhutan
and Nepal.
Under the agreement, Bangladesh
will earn about $125 million annually in transit
fees for the pipeline. Bangladesh also has the
right to buy gas from Myanmar if needed and can
access the pipeline to transmit its gas through
the pipeline for export at a later date. A joint
techno-commercial working committee will be set up
to advise the three governments on "pipeline
routing, access-related issues as well as
technical and commercial matters". It will meet in
Yangon in a month to prepare a draft memorandum of
understanding. The signing of the agreement is
expected to take place by early April.
The
pipeline agreement has been hailed in India as "a
major breakthrough in regional cooperation". It's
particularly seen as a landmark in
India-Bangladesh relations. As Aiyar pointed out,
it is the first time in over 30 years that
Bangladesh has agreed to its territory being used
for transport of any commodity.
Relations
between India and Bangladesh have been far from
cordial. This despite the fact that it was India
that helped Bangladesh, then East Pakistan, secede
from Pakistan. Indians view the growing distance
with their eastern neighbor in the context of its
warming relations with Pakistan as a betrayal. And
Bangladeshis resent being reminded that
independence from Pakistan was possible because of
Indian help. They feel they got their independence
due to their own efforts; India's help simply
hastened the secession. And they argue that India
helped them simply to break up Pakistan, which
suited India's interest.
A range of issues
trouble India-Bangladesh bilateral relations.
India feels that Bangladesh, especially under the
current Bangladesh Nationalist Party (BNP)-led
coalition government, is anti-India and
pro-Pakistan and that it is encouraging terrorists
to operate from its soil. Bangladesh has denied
these allegations. But the growing influence of
the Jamaat-e-Islami, an Islamic fundamentalist
party with pro-Pakistan leanings, and other
Islamist parties and groups in Bangladesh, as well
as growing anti-India sentiment in the country,
has made Delhi suspicious of Bangladesh's
intentions. Bangladesh, which is surrounded by
Indian territory on three sides, on the other hand
feels that India is exploiting it on issues
related to water-sharing and trade, prompting
Bangladeshis to refer to India as a giant neighbor
with a small heart. There are differences between
the two neighbors over the border and the issue of
illegal migration as well.
So severe is
Bangladesh's suspicion of India that it has been
reluctant to sell its own natural gas to India,
though this would benefit Bangladesh as well. The
issue has been caught in domestic wrangling and
political bickering for almost a decade, with the
sale of gas to India being portrayed by
Bangladeshi politicians as a "gifting away" of its
natural resources. In the process, Bangladesh has
been denying itself the opportunity of becoming a
regional energy hub.
The pipeline
agreement is thus no small achievement. But while
India is heaving a sigh of relief, it is still too
early for India to celebrate. Bangladesh has
stressed that its support on the pipeline project
is conditional on India conceding its demands on
trade and transit issues. "Without this bilateral
treaty, we will not sign the trilateral one," said
a Bangladeshi official.
According to noted
Indian strategic affairs analyst and professor at
the Jawaharlal Nehru University, Raja Mohan,
"Promises India made in the past about giving
better access to Bangla goods have not been kept"
and that India "tends to take away with one hand
what it gives with the other". This has been the
case with transit facilities it has provided
already for Bangladesh and Nepal at Phulbari in
the northern part of the state of West Bengal. The
transit facilities here are "primitive" and
"hinder rather than facilitate transit trade",
Raja Mohan points out.
Rights
fears
Activists are worried that the gas
deal may lead to more rights violations in
Myanmar, with its military regime implementing the
project using forced labor. As Aiyar was toasting
the deal with Bangladesh's Minister for Energy and
Mineral Resources, A K H Mosharraf Hossain, and
Myanmar's Energy Minister Brigadier General Luln
Thi, the Shwe Gas Campaign Committee (India), led
by dissidents, called on the Indian government to
postpone the project.
"We want India to
see the suffering that the project will cause to
the people of Burma [Myanmar]," said the statement
issued by the committee. "It's not that we do not
want India to have a relationship with Burma, but
we are simply asking India to wait until Burma
gains democracy," it added. According to the
group, Myanmar will implement the project using
forced labor, forced relocation and a large
military deployment to protect the gas pipeline.
"This will result in rape and other human rights
violations," said the dissidents.
US-based
environmental lobby group Earth Rights
International (ERI) pointed out in a report last
August that there were an alarming number of
similarities between the Yadana pipeline and the
proposed Shwe pipeline. "Forced labor and human
rights abuses are still an ongoing problem
throughout Burma, and it can be assumed that these
violations will continue at any major development
project site,'' said ERI. Last December, a
ground-breaking settlement was reached between
energy giant Unocal and villagers in connection
with the Yadana gas pipeline project. The
settlement reached in a US court will compensate
14 villagers who first sued Unocal in 1996
claiming it should be held liable for enforced
labor, murder and rape allegedly carried out by
the military during the construction of the
US$1.2-billion Yadana pipeline in the country.
The action was brought against Unocal,
which is based at El Segundo in California, on the
grounds that it benefited from the Myanmar
government's activity, even if it did not endorse
it. Legal experts now point out that the
settlement may have major ramifications for other
multinationals operating in Myanmar. Presently,
the Shwe pipeline consortium comprises four
entities. Daewoo International (60% stake) and the
Korean Gas Corporation (10%) are both incorporated
in South Korea, while India is represented by ONGC
Videsh Ltd and GAIL (with a total of a 30% stake).
(With input from Inter Press Service)
Sudha Ramachandran is an
independent researcher/writer based in Bangalore,
India.
(Copyright 2005 Asia Times Online
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