KOLKATA (miningweekly.com) – Pushing ahead with its ‘oil and energy diplomacy’ in neighbouring countries, India is considering building an oil pipeline to connect refineries in its north-eastern provinces to consumer centers in Myanmar.

According to senior government officials in the Petroleum and Natural Gas Ministry, several Indian oil refiner-marketers have already started marketing petroleum products in neighbouring Myanmar, with the construction of a pipeline seen as the “logical extension of India deepening its economic cooperation with countries in the region”.

The officials say that plans for constructing such a pipeline would be considered when oil refiners come up with an estimate of export volumes, provided that such volumes could justify the cost of a pipeline.

Numarligarh Refinery Limited (NRL) has been first off the block to market various petroleum products in Myanmar from its grassroot refinery located at Golaghat, in Assam. Officials said the Assam-based refinery was best placed geographically to cater to markets in Myanmar and that petroleum products would be shipped to the bordering country by road. However, NRL would benefit significantly from the proposed pipeline. As the crow flies, the distance between Assam and centre of Myanmar is about 553 km and about 938 km by road.

NRL, a government company owned by Bharat Petroleum Corporation, Oil India and the government of Assam, operates a three-million-ton-a-year refinery, which is being ramped up to nine-million tons a year.

Government-owned oil refiner-marketer Indian Oil Corporation (IOC) has also submitted a proposal to the Myanmar government to set up a retail outlet to vend automobile fuel, and once retail outlets are in place, it will also benefit from transporting petrol and high-speed diesel through the pipeline.

According to the officials, an oil pipeline to Myanmar is part of India’s plans to construct a network connecting neighbouring countries Nepal and Bangladesh and will expand Indian oil companies’ markets.

Significantly, IOC earlier this week floated an international tender for procuring materials for construction of an India-Nepal pipeline.

The transport infrastructure will entail an investment of $42-million, connecting the Indian border town of Raxaul to Amlekgunj, in Nepal. The pipeline will have the capacity to transport 1.3-million tons a year of petroleum products from IOC’s refineries located at the port town of Haldia, in West Bengal, and Barauni, in Bihar.

At the same time, India and Bangladesh have signed a nonbinding agreement for the construction of a 131-km pipeline to transport diesel and natural gas from a town in the north of West Bengal to Khulna, in Bangladesh. The pipeline will link NRL’s marketing and storage point in West Bengal to Bangladesh, for which NRL has already concluded a purchase-sale agreement with Bangladesh Petroleum.