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How India is countering China via energy pacts with neighbours

   May 7, 2018        458        Indrani Bagchi / India

Pushing a regional integration strategy as part of its foreign policy in the neighbourhood, India is building energy infrastructure in several south Asian countries. In Sri Lanka, where power plants are run mainly on liquid fuel, India recently signed an agreement to build an LNG terminal near Colombo in collaboration with Japan.

This will help Sri Lanka transition from more polluting fuels to less polluting ones. India sees this as incremental energy diplomacy. The hope is Sri Lanka, after moving to LNG from oil or coal, in the next step would see growth of CNG for vehicles and piped gas for households and commercial establishments in cities like Colombo. That would further aid India in expanding its energy markets outside the country. Bangladesh is already moving towards a gas-based economy, having significant gas resources of its own.

However, they will soon be running out of the resource. In Bangladesh, India is building a 6.5 mmtpa LNG terminal in Qutubdiya island off Chittagong forwhich a joint working group is already at work. India also wants to supply LNG to the Jessore-Khulna power plant with LNG from Dhamra. The two countries are currently working to connect their grids and finalised the alignment of the supply from Panitar on the Indian side. Sources said, India wantsto ramp up supply substantively to Bangladesh’s energy grid.

In addition, India would build connections from north-east states into Bangladesh — this would allow India to transport LNG to its northeast via Bangladesh. Foreign secretary Vijay Gokhale, during his recent trip to Dhaka, signed an MOU to build a petro products pipeline from Siliguri to Parbatipaur in Bangladesh. India plans to supply diesel to Bangladesh from the Numaligarh refinery, which is already being augmented from 3to 9 mmtpa.

Nepal PM K P Oli’s visit provided an opportunity for India and Nepal to augment an existing energy relationship by inaugurating a petro products pipeline between Motihari and Amlekhganj. India has also agreed to run an LPG pipeline along the same alignment. Myanmar and India have just started talks for India to build an LNG terminal near Yangon

India, which also supplies 100% of energy products to Mauritius, is considering an LNG terminal there too, to help Mauritius transition to cleaner fuel as well. Maldives is the only country in the neighbourhood where India is not moving at all. Officials said there was no interest forthcoming from the Maldives government.

(This article was originally published in The Times of India)

From The Economic Times