LNG diplomacy: India plans to build terminals in 4 nations

• State-run Petronet LNG Ltd (PLL) is planning to set up liquefied natural gas (LNG) terminals in Myanmar, Bangladesh, Sri Lanka and Mauritius at an investment of around $2.5 billion.

• This may boost India’s role in creating a new energy security architecture for its neighbours

• Also, Petronet, promoted by four Indian state-owned firms—GAIL (India) Ltd, Bharat Petroleum Corp. Ltd, Indian Oil Corp. Ltd and Oil and Natural Gas Corp. Ltd—is exploring a similar opportunity in the Maldives.

==> Reasons

• These terminals, totalling around 15 million tonnes per annum (mtpa), will reconvert natural gas shipped in a liquid form into gas and would help India exert economic and strategic influence in the region.

• The ambitious move to supply clean fuel comes in the backdrop of increasing Chinese influence in some of these countries that New Delhi has traditionally considered within its sphere of influence.

==> Current Status

• Of the four such overseas terminals planned, the ones with Sri Lanka and Bangladesh have already gained traction. A memorandum of understanding (MoU) and heads of understanding has been inked between Petronet and Bangladesh Oil, Gas and Mineral Corp., (Petrobangla) for the 7.5 mtpa terminal.

• An MoU has been inked with the Sri Lankan Government, with the island nation also issuing a Letter of Intent for the terminal to come up on its western coast.

==> Significance

• Encouraging cross-border energy trade is an important part of Prime Minister Narendra Modi’s South Asia-focused neighbourhood-first policy.

• India is also pursuing long-term deals with its neighbours for supplying domestic cooking gas and other petroleum products.

==> India energy partnership

• India has been setting up the building blocks of this new energy partnership with its neighbours.

• Apart from building power projects in Bhutan, Nepal and Bangladesh, India already has power grid links with Bhutan, Nepal, Bangladesh and Myanmar, and plans to develop power transmission links with Sri Lanka.

• Also, power-starved Bangladesh wants to buy at least 2,000 megawatts (MW) of electricity from large solar parks being set up in Gujarat and Rajasthan.

• India is also championing for a South Asian Association for Regional Cooperation (Saarc) Energy Initiative to create sub-regional hydrocarbon infrastructure such as gas networks.

• This is on the lines of the Saarc electricity grid which envisages meeting electricity demand in the region. Saarc groups India, Pakistan, Nepal, Bhutan, Bangladesh, Sri Lanka, Afghanistan and the Maldives.

==> Petronet Projects

• The firm was looking at setting up these terminals in Bangladesh (7.5 mtpa), Sri Lanka (2.6 mtpa), Myanmar (3.5 mtpa) and Mauritius (1 mtpa).

• The firm set up India’s first LNG terminal at Dahej (15 mtpa) in Gujarat, and another at Kochi (5 mtpa) in Kerala.

• Petronet had also announced its plans to partner with state-run ONGC Videsh Ltd (OVL) to pick up a stake in an upcoming exploration and LNG project in Qatar.

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