GAIL ambition for Bangladesh hostage to politics

Vol 8, PW 5 (02 Jun 04) Midstream & Downstream

GAIL is waiting for a clear signal from the new Congress administration in Delhi so that it can move ahead with its business plans for Bangladesh.

Our Bangladesh plans are closely linked to the political relationship that our new government has with Dhaka, reveals a senior GAIL source. We are waiting for signals from our political leadership.

GAIL normally has operational autonomy to translate its business plans into reality. But with Bangladesh its different.

In Dhaka, India is seen as a bullying big brother. Bangladesh is unwilling to export gas to us, he adds.

Nor is it replying to our request for transit rights for a gas pipeline from Myanmar. It makes no sense to move ahead with our business plans unless political ties are conducive.

GAIL has been exploring business opportunities in Bangladesh since early 2003, driven by the countrys 18 trillion cubic feet proven reserves and an additional 32 tcf probable. Another attraction is Dhakas enthusiastic support for projects that promote local gas use and the creation of gas infrastructure.

Lending agencies such as the World Bank and the Asian Development Bank are driving gas sector development programmes in Bangladesh. GAIL is also counting on the goodwill and corporate brand image it generated from an ADB sponsored CNG consultancy in Dhaka and its contacts in state-owned Petrobangla.

GAIL has signed gas-related MoUs with three Bangladesh companies: Business Development Corporation for exclusive co-operation in gas transmission and distribution pipelines, pipeline operations and maintenance services and exploration and production; Spectra International for CNG infrastructure development and retail marketing; and Cosmos Energy Services for natural gas liquid fractionation, gas processing and LPG plants.