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    Exploring cooperation between India’s Northeastern gas grid and Myanmar [GGP]

Summary

A cross-border natural gas pipeline between India and Myanmar will be an important symbol of bilateral cooperation and regional connectivity.

by: Sanket Sudhir Kulkarni & Ameya Pimpalkhare, Observer Research Foundation

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Complimentary, Global Gas Perspectives

Exploring cooperation between India’s Northeastern gas grid and Myanmar [GGP]

In the last few years, the importance of natural gas as a key contributor for India’s sustainable energy security has begun to receive greater acceptance within India’s energy policy making circles. The Government of India on quite a few occasions now has reiterated its intention to make India a “gas-based economy” by increasing the share of natural gas in India’s energy mix to 15 % by 2030.

Given natural gas' profile as an efficient and environmentally-conducive fuel when compared to other fossil fuels, India has embarked on a journey to increase its contribution in the nation’s primary energy mix. Gradual steps are being initiated since the last few years to ensure steady evolution of a gas market in different parts of the country. Since its launch in 2016, under the Pradhan Mantri Ujjwala Yojana (PMUY), a scheme to provide LPG cylinders as a clean cooking fuel, the spread of cylinders increased substantially from 55% in 2014 to over 90% today. This jump is due to the addition of 60 million new connections with a target to reach 80 million connections by 2020. As of 2014, only 66 districts in India were under the City Gas Distribution network, but by 2018 work on city gas was already underway in 174 districts with a target to reach more than 400 districts in the coming years. Also, the number of CNG stations have increased to 1,400 in 2018 with a target of 10,000 stations in the coming decade. Additionally, as a result of emergence of new players in the global gas markets, India is now presented with the choice of choosing between multiple gas producers to meets these future energy targets.

Since its launch in 2016, under the Pradhan Mantri Ujjwala Yojana (PMUY), a scheme to provide LPG cylinders as a clean cooking fuel, the spread of cylinders increased substantially from 55% in 2014 to over 90% today.

Within India, the reach of domestic pipelines is being expanded in different states. It is reported that an additional 14,239 km of gas pipelines are in the process of being developed to ensure supply to different parts in the country. Traditionally, so far, only the western and, to some extent the northern region of India are major consumers of natural gas. In the Northeastern region of India, states like Assam, Arunachal Pradesh and Tripura are reported to have considerable volumes of natural gas reserves. The state of Tripura exports electricity generated from gas-fired Palatana power plant to Bangladesh.

Reportedly, the Government of India has embarked on a journey to connect Northeastern states with the National Gas grid. Once connected with the National Gas Grid, the Northeastern states in India will have access to gas supplies to support their economic development activities. Since the last few years, the Government of India is undertaking policy measures to improve economic development, connectivity and livelihood in Northeast India. A sustained supply of an efficient and environment friendly natural gas would play a crucial role in supporting such economic developments and connectivity activities in Northeastern states of India. The City Gas Distribution network covering some prominent districts in Northeast India is being planned in three phases and it is envisaged that by 2030, the demand from this sector alone is slated to be 4.4 mmscmd. The overall gas demand by 2030 in Northeast India is estimated to be about 29.4 mmscmd, of which, the natural gas deficit is predicted to be about 8.7 mmscmd as per the Hydrocarbon Vision 2030 report for Northeast India.

To ensure energy security in the eastern region of India, the Dhamra port in the state of Odisha is being developed to receive LNG imports worth 5 MMTPA. This LNG terminal, reportedly, would cater to the demands of fertilizer plants and for city gas distribution networks in eastern region of India.

The City Gas Distribution network covering some prominent districts in Northeast India is being planned in three phases and it is envisaged that by 2030, the demand from this sector alone is slated to be 4.4 mmscmd.

Given the reduction in global natural gas prices world over, it would make sense for India to use natural gas from Dhamra port to supply natural gas to its eastern region. However, it could also be worthwhile for India to consider leveraging the possible availability of natural gas reserves from some of the newly developing energy blocks in Myanmar’s onshore and offshore areas. Given Northeast India’s geographical proximity to Myanmar, it would be worth considering the exploration of possibilities for cooperation — in the realm of natural gas trade. In the mid-2000s, the Government of India had entered the race to build a gas pipeline from Myanmar transiting through Bangladesh and then entering India. India had alternately also proposed to build a bilateral India-Myanmar gas pipeline, due to differences with Bangladesh. However, the proposed bid from India could not fructify and Myanmar then decided to allow China to build a bilateral pipeline. This pipeline, among many such sources of natural gas imports for China, is presently satiating it’s ever growing appetite for energy.

Currently Myanmar does not have any surplus natural gas which it could export. As per reports, Myanmar itself is contemplating importing LNG from abroad. However, it was indicated in another media report that Myanmar is considering opening bids for energy blocks in this year. If in the near future, Myanmar indeed makes some new discoveries of natural gas, India could pursue bidding for a pipeline to transport any surplus natural gas available with Myanmar to India’s Northeastern states. Given Northeastern India’s proximity to Myanmar, it would be prudent to consider leveraging the energy development activities underway in Myanmar. One of the advantages of building natural gas pipeline (trilateral or bilateral) is the fact that given Myanmar’s geographical proximity to Northeastern states of India, transportation of gas would be affordable. Secondly, as India embarks on building new relations with countries in South-east Asia, a cross-border natural gas pipeline between India and Myanmar will be an important symbol of bilateral cooperation and regional connectivity.

Given Northeast India’s geographical proximity to Myanmar, it would be worth considering exploration of possibilities for cooperation — in the realm of natural gas trade.

It would be pertinent for Myanmar to take note of the fact that on its western side, in Northeastern states of India, there lies a promise of a thriving energy market for Myanmar’s gas. At the policy level, the Hydrocarbon Vision 2030 for Northeast India has already indicated the fact that the availability of any surplus supplies of natural gas in Myanmar could be imported to India’s Northeastern states. These factors and others can ensure that India’s Northeastern gas grid and Myanmar’s promise of energy reserves complement each other. Hence, the Government of India must consider reviving the idea of a bilateral natural gas pipeline with Myanmar to cater to the evolving energy needs of Northeast India.

Sanket Sudhir Kulkarni is a Fellow, Observer Research Foundation. Ameya Pimpalkhare, is Associate Fellow, Observer Research Foundation.  Originally published by the Observer Research Foundation.

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