Indian partners in Bangladesh gas to compete among themselves

The Bangladesh government has decided that IOC, Gas Authority of India (GAIL) and ONGC, which are partners in a consortium bringing Bangladesh gas into the country, will be competing among themselves for building, operating and maintaining the pipeline on the Indian side.
Significantly, GAIL had already asked its consultants Mecon to withdraw a tender floated by it for the proposed pipeline. The role of three PSUs in the consortium had been a bone of contention since both IOC and GAIL wanted to be the lead partner. However, IOC was granted the status.

Sources said that it has now been decided that the consortium, to begin with, would be headed by a chairman from GAIL while the managing director would be from IOC. GAIL would also have the director technical’s post. The posts would be rotational among the three after three years.
It has also been decided that the financing for the project will be on the basis of recourse financing in proportion to the equity holding in the consortium. Thisimplies that money will be raised on the strengths of the project rather that of balance sheet of the promoters.

ONGC has also agreed that exportable gas available from Tripura can be brought via Bangladesh or be sold to it on the same price as it will be made available to India. The marketing of gas will be done by the consortium in which IOC will have 48 % equity while GAIL and ONGC will hold 26 % each.
A consultant for conducting a market survey for the imported Bangladesh gas will be appointed before floating bids for construction of pipelines. Crisil and IMRB have been shortlisted out of the six consultants, which approached GAIL for conducting the survey.
All this means that preparations on the Indian side are in full swing even as the Bangladesh government is yet to decide on how much gas it will import in the wake of anti-India feelings in the country. American company Unocal, which has struck gas in the Bibiyana fields in Bangladesh, has been lobbying with both the governments to get the project going.

The Bangladesh government has set up its expert committees to find out the best utilisation of its gas reserves as well as the exact availability of gas in the country since there are conflicting claims on the extent of reserves. The reports of these two committees are still awaited.
Unocal plans to bring 500 mm cfpd of gas from Bibiyana fields to the Delhi region. The company feels that even if Bangladesh decides to export gas to India there will be enough left for its domestic utilisation.