In a strategy to build a better hydrocarbon transportation network to meet increasing demand for energy, the South Asian Association for Regional Cooperation (Saarc) has decided to build cross-border pipeline routes for ferrying natural gas and products.
The member nations of Saarc, Nepal, Bangladesh, India, Pakistan, Bhutan and Sri Lanka, have decided to carry out feasibility studies for cross-border pipeline linkages for transportation of natural gas and petroleum products, highly placed sources told FE.
The study would be carried out under the Saarc inter-governmental framework agreement for energy co-operation (IGFA-EC). “It will also explore the possibility of laying an inter-country grid to facilitate movement of gas, crude oil and other petroleum products, from outside of Saarc, to the land-locked South Asian member states,” said a senior official privy to the development.
The plan included identifying the possible routes, determining the cost of construction, identifying operation and maintenance problems as well as suggesting safety standards.
It is learnt that Bangladesh has been entrusted with preparing a work plan for the oil and gas sector. “As per the work plan, the member nations would assess the regional gas demand and supply, vis-a-vis opportunities, possibilities and the impact of the proposed gas transmission pipelines to South Asia from Iran, Turkmenistan and Myanmar,” the official said.
Along with this, they also decided to review the linkage of the existing natural gas systems of Pakistan, India and Bangladesh, the official added.
The Narendra Modi-led government is making moves to set up such pipelines connecting India to its neighbours Nepal and Bangladesh. Laying of a product pipeline from Siliguri in India to Partapur in Bangladesh would be possible due to enhanced product availability after the expansion of the Numaligarh refinery in Assam.
This could facilitate export of around 1 mtpa diesel to Bangladesh and open opportunity for enhanced bilateral trade ties with Bangladesh. In addition, expansion at the Numaligarh refinery would open petroleum product export opportunities to Myanmar.
Outside the Saarc region, India is engaged in the TAPI pipeline, the construction of which is expected to start in 2015. In addition, Russia is looking to boost ties with India with discussions on a hydrocarbon pipeline between the countries.
Saarc Energy Centre was given the mandate to conduct a study in this regard by engaging a reputed consultancy firm or inter-governmental agency. While India’s oil ministry wants GAIL (India) to be co-opted as one of the members for the gas grid work plan, it is pushing for one of the OMCs, BPCL, HPCL or IOC, to be made a part of the other group, in addition to the Oil Industry Safety Directorate.
The plan is to work on setting up Saarc regional and sub-regional LNG terminals as well as joint oil refineries, as recommended by the Saarc Regional Energy Trade Study. For LNG terminals, it was decided that a study would be conducted to assess the existing gas demand and supply situation, future planning of member states, the indicative cost of construction of terminals, probable locations, economies of scale, tariff and other relevant issues like demand profile, LNG sourcing, shipping arrangements as well as receiving and re-gasification terminals.
For refineries, the work plan included identifying locations, determining the refinery plant size, considering the geographical location of countries and the load centres. The study would include carrying out a feasibility study of setting up joint oil refineries vis-a-vis individual refineries by member countries. Saarc IGFA-EC has envisaged regional strategic oil storage facilities. This would be done in terms of maintaining emergency regional reserves of petroleum products at one or more places to support member states in meeting emergency needs.
Building energy ties:
Cross-border pipeline linkages for transportation of natural gas and petroleum products
Bangladesh to prepare a work plan for the oil and gas sector
GAIL (India) wants to be co-opted as a member for gas grid work plan; one of the PSU OMCs, BPCL, HPCL or IOC, to be made a part of the other group
Member countries to look at sub-regional LNG terminals and joint oil refineries
To exchange geological information for promotion of oil and gas exploration