BCIM offers pathway for broader China-India energy cooperation

China’s natural gas supply can’t meet its soaring demand, especially since the government wants to use more of the fuel to cut pollution. There’s a similar situation in India, which has 17 percent of the global population but only 1 percent of the world’s oil and natural gas reserves.

India is also a rapid-growth economy, and the industrial development promoted by the Narendra Modi administration since 2014 has aggravated the energy shortage. India’s demand for natural gas is set to increase due to the incentives to reduce greenhouse gas emissions and air pollution.

Last year, Sino-Myanmar pipelines played a crucial role in alleviating the natural gas shortage, providing 450 million cubic meters of natural gas to Yunnan Province in the southwest corner of China. Under the framework of the Bangladesh-China-India-Myanmar (BCIM) economic corridor, Myanmar has the potential to become the key area to promote Sino-Indian economic cooperation.

There is a huge imbalance between the western and eastern sides of India. Compared with the western region, the eastern side has a lot to do to catch up in terms of infrastructure, industrialization and the business environment.

Currently, India relies heavily on the Gulf Bay for oil and gas resources. The major ports for oil and gas shipments are all located on the west coast. The east coast does not have major ports for these resources, so pipelines have been built to transfer the imported resources from the west coast to the east.

In recent years, India has focused on the development of the eastern part of the country, and this has shown up east India’s energy demand.

The Gas Authority of India is expected to complete phase two of the Jagdishpur-Haldia and Bokaro-Dhamra natural gas pipeline at the end of 2018, connecting eastern India with the national gas grid. The first natural gas terminal built by the Indian Oil Corp in the Kamarajar port in Ennore is likely to start operating this September.

Infrastructure construction is also important for energy supplies, and the eastern part of the country needs more investment in infrastructure. Some states in India, especially West Bengal with Kolkata as its capital, have contacted provinces in China to seek more foreign direct investment.

Myanmar has rich oil and natural gas resources, tapped and untapped, and these are exactly what India needs. Instead of cooperating with Qatar and Indonesia, Indian can turn to Myanmar, which is closer.

There are two possible paths to send Myanmar’s natural gas to India. One option is to build a land pipeline passing through Bangladesh, but due to unrest in northeast India and uncertainty over whether Bangladesh is willing to take part, this option has been put on hold.

The other option is sea transport. Although it’s not as convenient as building a pipeline, the distances involved would be much less than the current situation.

Sino-Indian energy cooperation began long ago, and some of it has included Myanmar. For instance, the Shwe Gas Project, which includes building an offshore natural gas field at the Bay of Bengal in Myanmar, was supported by China, Myanmar and India. The China Petroleum Pipeline Bureau also took part in natural gas pipeline construction in India.

As energy demand continues to expand, China and India will have to carry out deeper cooperation with Myanmar and Bangladesh. Candid communication will be the best thing for China and India. China may provide a platform for Indian to negotiate pipeline construction with Bangladesh.

Also, more direct investment from China can be devoted to infrastructure and public facilities, including pipelines in east India.

Some people in India believe their country won’t get the same kind of returns as China from the Myanmar natural gas project, despite the amount invested by the Indian state and private companies. This misunderstanding should be addressed, or it will hinder regional energy cooperation.

China and India, as two energy-intensive economies, must compete for resources to a certain extent. But this competition is still a healthy one. Though it will increase the costs for both China and India, the negative influence on the international energy market and the broader Sino-Indian relationship will be limited.

Instead of competition, cooperation sounds more appealing. The two countries have crucial common interests in clean energy, energy conservation technology and new energy development. Those are likely to be the primary areas and general trends for cooperation.

The two nations ought to seek energy cooperation under multilateral cooperative mechanisms such as the Shanghai Cooperation Organization and the BRICS (Brazil, Russia, India, China and South Africa) grouping, while continuing to operate under the BCIM framework.

Source : Global Times

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