[PEN-L:28404] Pipeline politics in Bangladesh

["Ulhas Joglekar" <joglekarulhas@xxxxxxxxxxx>]

The Hindu

Monday, Jul 22, 2002

Pipeline politics in Bangladesh

By C. Raja Mohan

NEW DELHI JULY 21. Under pressure from the American energy companies to
export its vast natural gas resources to India, Bangladesh is nearing yet
another frustrating non-decision. A committee set up by Dhaka to examine the
options on the utilisation of its gas resources is likely to submit its
report next week.
But don't hold your breath. Media reports from Dhaka say the Committee might
avoid a clear position on gas exports. The panel could recommend that gas
exports are all right if new fields are discovered. In other words, "not
now''.
This will not please the American company, Unocal, which has been moving
heaven and earth for a green signal from Dhaka on gas exports. Unocal wants
to build a 1,363-km pipeline to move gas from the Bibiyanah gas field in
North Eastern Bangladesh to the HBJ pipeline near Delhi. It will run through
West Bengal, Bihar, and Uttar Pradesh.
Unocal has a simple case: the $1.2 billion project would bring in an
estimated revenue of $3.7 billions to Dhaka over the next 20 years, and an
immediate investment of about $700 millions. Jobs and development associated
with such a mega project are extras. Unocal also believes that Bangladesh
could become an energy hub allowing the transport of gas from Myanmar and
North Eastern India to the energy-hungry mainland. Dhaka could just sit back
and charge transit fees. But nothing is simple in Bangladesh, which is
traumatised by the prospect of ``giving away'' its natural resources to
India. In the wake of the Unocal proposal, the Bangla Supreme Court itself
intervened to prevent an immediate decision.
The Bangladesh National Party, now in power, was opposed to gas exports to
India when in opposition. Once in power, it has shown some flexibility,
under American pressure. Its move to set up a committee on gas utilisation
was widely seen as a way of moving towards that difficult decision. But
since when have committees taken bold decisions?
***
The key question in the Bangla debate on energy exports is the following.
How much gas is there? Ultra-nationalists in Bangladesh worry that there is
not enough for future domestic consumption. Pragmatists, far fewer, say
there is enough and then some for exports. Realists, almost extinct, know
that unless Bangladesh exports some of its gas, it will not be able to able
to pay the oil companies in dollars. Dhaka believes the gas reserves are
around 16 trillion cubic feet. The U.S. Geological Survey in a recent report
estimates there is additional 32 tcf of ``undiscovered reserves''. The oil
companies argue that without a decision to export gas to India, there cannot
be new exploration which could help expand the size of "known reserves''.
That brings us back to politics. Can Bangladesh really think big and act
bold? Your guess is as good as mine. For the leaders of the Subcontinent
have wallowed in poverty for so long that they do not know how to generate
prosperity through cooperation.
***
Yes, Unocal is the same company that wanted to build a natural gas pipeline
from Turkmenistan to India through Afghanistan and Pakistan. They tried hard
to sell the idea to the Taliban, which was more interested in spreading
Islamic revolution than making money. Amidst protests that it is dealing
with the devil, Unocal finally pulled out of the project in the late 1990s.
Unlike the petty minds in the Subcontinent, American oil companies have
always dreamt expansively and took huge risks. Unocal continues to believe
that eventually a network of pipelines will physically connect the producers
and consumers of oil and natural gas in Asia from Indo-China to Turkey.
***
Thanks to the defeat of the Taliban, the Afghan pipeline project is back in
play. In May, the leader of Afghanistan, Hamid Karzai, the strongman of
Turkmenistan, Sapamurat Niyazov, and Pakistan's Pervez Musharraf, met in
Islamabad to revive the plans for the Afghan pipeline. Unocal is yet to show
its hand.
But there is an interesting new player — Russia — in the Great Game of
Central Asian pipelines. Around the same time as the triangular meeting in
Islamabad, a high-powered delegation from Gazprom — the Russian gas giant —
visited Pakistan to sound out the prospects.
Russia believes it could play a key role in building pipelines from both
Iran and Central Asia to the Subcontinent, and is stepping up its political
and petroleum contacts with Pakistan.
The Americans, meanwhile, have decided that Russia is a partner and no
longer a rival when it comes to energy politics in Central Asia.
After nearly a century of suspicion, Washington and Moscow are ready to work
together; but going by the present form, New Delhi and Dhaka will rather
fight petty on trade and transit than make money on mega projects. Sadly,
grand thinking does not come easily to the Subcontinent.

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